Insights UK Digital Markets, Competition and Consumer Bill: second reading in House of Lords

As reported by Wiggin previously, the Digital Markets, Competition and Consumer Bill (“DMCC”), first published in April 2023, proposes several provisions to strengthen competition and consumer law in the UK.

On 5 December 2023, the DMCC had its second reading in the House of Lords where certain aspects of the bill were debated, including several of the amendments made to the original text of the DMCC which were passed by the House of Commons on 21 November 2023. The debate indicates that certain aspects of the DMCC are likely to be further scrutinised by the House of Lords, including the possibility of tabling amendments, during the next step in the legislative process, the House of Lords Committee Stage. These include:

  • Commons amendments providing that the Competition and Markets Authority (“CMA”) may impose conduct requirements and pro-competition interventions on firms only where it is proportionate to do so and, before imposing conduct requirements, requiring the CMA to also consider the benefits for consumers.
  • Commons amendments in relation to third party litigation funding agreements.
  • The rules on appeals. The DMCC provides that the judicial review standard will apply to appeals against CMA decisions. However, this will not apply to appeals against fines, for which a merit-based appeals system will apply. This means that firms can only challenge decisions, such as a “strategic market status” designation or the imposition of conduct requirements, on proportionality grounds. The Government has stated that this will avoid challenges to the regime getting bogged down in the courts while at the same time ensuring that the huge fines that can be potentially imposed on firms can be challenged both on the substance of the decision as well as the process adopted to reach the decision.
  • Commons amendments allowing the CMA to make a market investigation reference even if it has previously decided not to (if two years have passed since publication of the relevant market study report, or if there has been a material change in circumstances since the original market study report). This came after a recent ruling by the Competition Appeal Tribunal that the CMA had been out of time in making a market investigation reference following a mobile ecosystems market study report. In fact, that ruling has now been overturned by the Court of Appeal (as previously reported by Wiggin) obviating the need for this amendment.
  • Commons amendments allowing the CMA to amend remedies following a market investigation for a period of ten years if they are deemed ineffective.
  • Drip pricing and fake reviews. Despite the Government’s concern over drip pricing and fake reviews and their issue of a consultation (which closed on 15 October 2023) on those topics, so far no amendments addressing those issues have made it into the current version of the DMCC.
  • Collective proceedings in consumer claims. The amendment proposed in the Commons to introduce collective actions for breach of the provisions of the DMCC relating to unfair commercial practices and subscription contracts (similar to the system of collective proceedings that may be brought for competition infringements) was not accepted by the House of Commons, but indications are that there may be attempts to re-introduce it.

The Bill will now enter the Committee Stage in the House of Lords.

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