Tech companies to see digital regulation come to the UK

More than a year after its first reading in the House of Commons, the Digital Markets, Competition and Consumers Act 2024 received Royal Assent last Friday - one of a handful of bills to be passed in the “wash-up” period before Parliament was prorogued on Friday following the hasty announcement of the UK general election.

The Act introduces the most sweeping reforms to competition law and consumer protection in the UK in the last 20 years. Not least, it introduces a targeted regime aimed at increasing competition in digital markets, to be overseen by the Digital Markets Unit within the Competition and Markets Authority (CMA).  The CMA will be empowered to designate tech firms as having strategic market status (or SMS) where certain criteria are met (as explained in a previous newsletter). Following designation, the CMA will be able to impose tailored conduct requirements on an SMS undertaking and make pro-competitive interventions where this would help remedy an adverse effect on competition. SMS firms will also be required to report certain possible mergers to the CMA ahead of completion (see previous newsletter).

Late on Friday evening, just hours before the start of the pre-election period (during which public bodies like the CMA must adhere to certain requirements not to make announcements which might compete with the election campaign for public attention or call into question public bodies' political impartiality), the CMA published for consultation its draft guidance for the digital markets competition regime - specifically, its draft digital markets competition regime guidance (along with a helpful summary, given its length) and draft guidance on the mergers reporting requirement for SMS firms. Firms have until 12 July 2024 to respond, and the CMA currently plans to publish a final version of the guidance around the time the new digital markets powers commence - expected to be in October this year.

We will be covering the Digital Markets, Competition and Consumers Act 2024 in more detail in our forthcoming Competition & Regulatory Newsletter, as well as in detailed client briefings over the coming weeks.