An overview of the new Digital Markets, Competition and Consumers Bill

On 25 April 2023 the government introduced the Digital Markets, Competition and Consumers Bill (the ‘DMCC Bill’) to parliament. The aim of the DMCC Bill is to provide further protection to consumers and increase competition between big tech firms. It will also strengthen the Competition and Market Authority’s (the ‘CMA’) powers to tackle unfair practices and will allow the CMA to issue fines up to 10% of global turnover for non-compliance. Given the severity of the potential fine for non-compliance it is critical for businesses to prepare and understand what will be required of them under the DMCC Bill if it is passed into law by parliament.

We summarise some of the key features of the DMCC Bill below.

• One of the main aims of the DMCC Bill is to take action in relation to “fake reviews”, including banning people receiving money and/or free goods or other perks in return for writing glowing reviews. This will put an onus on those businesses dealing with consumers and comparison platforms to take reasonable steps to verify that product and service reviews are genuine.
• Another key issue which the DMCC Bill aims to tackle is subscription “traps” and pressure selling.  For example, the DMCC Bill will require businesses to remind consumers when a free subscription period is coming to an end.
• The powers granted to the CMA under the DMCC Bill will give it the autonomy to decide whether a consumer law has been breached (rather than having to seek a court order each time), and if so, the CMA will be able to issue fines of up to 10% of global turnover for non-compliance depending on the offence.  The DMCC will also introduce rules which will make it easier for the CMA to take action against mergers which harm UK consumers and businesses.
• The DMCC Bill will also see the introduction of a newly formed Digital Markets Unit, which will be part of the CMA and given certain powers to tackle the excessive dominance that a small number of big tech companies have held over consumers and businesses in the UK.

Sarah Cardell, the Chief Executive of the CMA, says: “We welcome this flagship bill which provides the CMA with new powers to do even more to protect people, businesses and support the economy. This has the potential to be a watershed moment in the way we protect consumers in the UK and the way we ensure digital markets work for the UK economy, supporting economic growth, investment and innovation.”

The new legislation is particularly welcomed by those in the hospitality sector following growing concerns about the “fake review trend”, which can cause significant damage to a business, particularly if a negative review is left and/or consumers are misled to eat elsewhere.

Depending on the severity and impact of a fake/negative review, other legal remedies may also be available to a business, especially if the review is defamatory in nature.  In these situations, a business may want to consider whether it is appropriate to take legal action against the author to remove the review and/or to recover damages.

We will keep you updated on the DMCC Bill as it makes its way through the parliamentary process, including any key amendments which may be made and when it is likely to become law.

Our Corporate & Commercial and Disputes teams can provide a route map of the law specific to your business and/or sector to help you avoid non-compliance with these laws or to tackle a severely defamatory review. Please get in touch.