Changes to Digital Markets Bill introduced to ensure fairer competition in tech industry
Changes will ensure regulator cannot impose an intervention on a firm unless it is proportionate to do so.
- Amendments tabled to Digital Markets, Competition and Consumers Bill to balance regulator powers with fair review processes
- changes will ensure regulator cannot impose an intervention on a firm unless it is proportionate to do so
- the Bill is set to ensure the UK remains one of the best places to invest in and innovate new technology
The Digital Markets, Competition and Consumers Bill is set to introduce a new targeted and proportionate regulatory regime to address concerns around competition in the digital industry while ensuring that the UK remains one of the best places to invest in and innovate new technology.
At the heart of the Bill is a new approach to digital market regulation, allowing the Competition and Markets Authority (CMA) to intervene quickly and flexibly to promote competition.
Amendments to the Bill proposed by the government today (Wednesday 15 November) will maintain the appeals process for all regulatory decisions (except fines) on the basis of judicial review principles. This will mean that eligible tech firms can challenge regulatory decisions on proportionality grounds through this process.
This approach will enable the CMA to encourage the most powerful firms in dynamic digital markets to work with regulators to ensure competition is maintained on an ongoing basis, rather than allowing legal challenges to cause the regime to get bogged down in the courts. This will also act as a further incentive on the CMA to ensure that it is always acting proportionately and exploring the intervention that is most likely to achieve the best outcome for consumers.
Under the Bill, certain firms may also be subject to fines that could reach tens of billions of pounds. To make sure these huge fines are balanced by rigorous checks and balances, these firms will now be able to challenge these decisions “on their merits”. These changes allow firms to challenge fines on the substance of the decision, as well as the process to reach that decision.
The legislation will also make clear that the regulator cannot impose a conduct requirement or pro-competition intervention on a firm unless it is proportionate to do so and there is a strong evidence base behind the intervention.
These amendments bring the digital markets regime in line with the approach taken for decisions under the CMA’s Mergers and Markets regimes, where the decisions about the level of a fine can be appealed on the merits.
Department for Science, Innovation and Technology Minister, Saqib Bhatti, said:
Britain was the third country in the world to build a trillion-dollar tech sector, and our fastest growing firms continue to pull in more capital than counterparts in France and Germany combined. Free competition is key to keeping the wheels turning this vital, complex industry as it turbocharges growth across the UK.
This Bill addresses barriers to competition that are unique to digital markets by taking a bespoke and flexible approach, backed up by strong new powers.
The changes we are making ensure that the regulator takes proportionate action and avoids undue regulatory burdens, while remaining accountable for decisions that will have far-reaching economic consequences.
Following extensive engagement across the technology industry, amendments proposed by the government today make sure that the regulator’s interventions will always be proportionate to addressing the harm being caused to consumers and competition.
Further amendments today also boost the consideration of consumers by making the regulator set out its reasoning for intervening in a market, including how this will tangibly benefit consumers.
This Bill uses the freedoms gained by the UK after leaving the European Union to enhance digital competition to drive growth and benefit consumers. Under the new powers granted by the Bill, the CMA will prioritise its interventions according to the evidence of harms and will target those by creating bespoke remedies.
The Digital Markets, Competition and Consumers Bill is expected to save consumers £9.7 billion over 10 years as UK consumers benefit from new rights, stronger law enforcement, and more competition including through merger control.
Notes to editors
Further details on the regulatory reforms as part of the Digital Markets, Competition and Consumer Bill can be found here: The King’s Speech 2023 briefing notes.
The amendment can be found here: Digital Markets, Competition and Consumers Bill - Parliament.