While the CMA looks ahead to implementing the DMCC Bill, the Government should look to learn from other early movers in implementing digital competition regulation
The Government requests roadmap from CMA for implementing the DMCC Bill
On 4 January 2024, the Competition and Markets Authority (CMA) and the Department of Business and Trade (DBT) and the Department of Science, Innovation and Technology (DSIT) exchanged letters regarding preparation to implement the Digital Markets, Competition and Consumers (DMCC) Bill. In the initial letter sent to the regulator, the Parliamentary Under Secretaries of State for DSIT and DBT requested that the CMA publicly release a provisional roadmap for implementing the DMCC Bill, including timelines for expected consultations and plans for engaging stakeholders designated with Strategic Market Status (SMS). The Government specified that it believed such a provisional plan would assist Parliamentarians as they continue to consider the legislation while better informing stakeholders which may need to eventually comply. The CMA responded quickly to confirm it would publish a document in line with the Government’s request but didn’t note when that plan could be expected. Such a plan of action is not an unprecedented request in the recent history of policymaking in the UK. Ofcom published a “roadmap to regulation” over a year in advance of the Royal Assent of the Online Safety Act detailing similar information on how it planned to undertake its new regulatory roles.
The latest changes to the DMCC Bill including expanded grounds for appeals
The DMCC Bill has reached the committee stage in the House of Lords, some four years on from the beginning of the UK’s efforts to create a “world-leading” regime to govern digital markets. While the framework of the legislation has remained largely unchanged since its publication in April 2023, details of how the CMA’s Digital Markets Unit (DMU) will be able to enforce these new rules continue to shift. In November 2023, the Government laid out nearly 200 amendments, including controversial changes to the appeals process for decisions made by the DMU. Under these changes, firms designated with SMS would be able to challenge fines imposed by the DMU on their merits. Prior versions of the text only allowed for challenges under the judicial review standard, meaning only procedural concerns would’ve been fair game for appeal. Additionally, the Government added a requirement for the DMU to consider proportionality when imposing conduct requirements on firms with SMS, meaning firms could also appeal these requirements on the ground they weren’t proportional to the context. While the main tools provided to the DMU to enforce these new rules remain intact, these broadened grounds for appeal could undermine the ability of the regulator to act in a timely and decisive manner in regulating the well-resourced tech industry.
Despite delays, the UK is still an early mover in regulating digital markets
While the DMCC Bill has been underway, only a handful of other jurisdictions moved ahead with passing ex-ante regulation on digital markets. Most notably, the EU is now preparing to enforce the obligations placed on firms designated as gatekeepers under the Digital Markets Act (DMA). Platforms will be required to comply with these obligations as of March 2024, even as some challenge their status under the law. Lawmakers in the US have responded to the impending deadline by urging President Biden to seek concessions from the EU on behalf of the US tech firms facing additional obligations under the DSA, even as Congress considers its own version of digital competition policy through the American Innovation and Choice Online Act. Other countries, including Australia and India, appear to be inching towards regulating digital markets as well, although the timeline for legislative action remains unclear in both places. With the UK poised to be the next global power set to reign in the abuse of dominance of big tech, the Government should recognise its opportunity to benefit from lessons learned in the beginning phases of the implementation of the DMA without discounting the influence which the DMCC Bill could have on a still developing global approach to competition policy for the digital world.
