Out-Law News 8 min. read

UK's landmark DMCC Bill becomes law

The highly anticipated Digital Markets, Competition and Consumers (DMCC) Bill was passed by the UK Parliament on 23 May, marking the most important changes to UK competition law and consumer law in years.

The bill received royal assent on 24 May 2024, marking a year since its first introduction to the UK Parliament. Importantly, the DMCC Bill also creates a brand-new ex ante digital competition regime that is the UK equivalent of the EU’s Digital Markets Act (DMA).

Digital markets

Enforcement of the new digital competition regime will be led by the Digital Markets Unit (DMU) within the Competition Market Authority (CMA). The DMU was established back in April 2021; however, until now, it has operated in ‘shadow’ form without its own bespoke powers, contributing to the CMA’s wider work in the digital sector using pre-existing legislative powers.

The regime binds firms that are designated by the CMA as having “strategic market status” (SMS). Important aspects include the statutory criteria and procedures the CMA must follow for designating SMS firms. Each SMS firm will have to comply with its own specific set of conduct requirements that are developed and enforced by the CMA.

Conduct requirements must comply with fair dealing, open choices, and/or trust and transparency objectives, and must be of a “permitted type”- that is, one or more of the positive or negative obligations listed in the DMCC Act.

“The CMA will have to publicly consult on proposed conduct requirements before they become binding, with various investigatory and enforcement powers to ensure compliance. The CMA must ensure that the obligations imposed under the conduct requirements are proportionate” said Tadeusz Gielas, competition law and consumer protection expert at Pinsent Masons.

SMS firms may rely on the “countervailing benefits exemption” in response to a CMA investigation into a suspected breach of their conduct obligations, if the firm can demonstrate that its alleged breach led to consumer benefits that outweighed the harm caused and met certain other statutory requirements.

Firms will also be subject to mandatory reporting obligations in respect of proposed mergers and acquisition (M&A) transactions. Proposed transactions will need to be reported to the CMA where: the SMS firm will acquire over a 15% equity or voting share as a result of the transaction; the total value of the firm’s holding is over £25 million; and the target or joint venture is a “UK connected body corporate” as defined by the DMCC Act. The M&A deal cannot complete for five working days after the CMA has officially accepted the merger report.

“These new rules are intended to help the CMA detect and review so-called “killer acquisitions” in the digital sector more effectively, but do not create or amend substantive merger control rules under the UK’s pre-existing, wider, mergers regime,” said Gielas.

The CMA will also be able to investigate potential competition issues in digital markets, even when there is no suspected breach of conduct requirements. The new digital competition rules give the CMA extensive powers to investigate suspected infringements including the ability to demand information and documents as well as conducting dawn raids. Non-compliance with a CMA investigation may lead to substantial fines for individuals or companies, including up to 10% of the company’s global annual turnover. The CMA may also use other powers, such as making enforcement orders, interim orders or accepting commitments, or taking court action. It may also seek the disqualification of company directors for up to 15 years.

CMA decisions under the new digital competition rules will be appealable under the more stringent judicial review standard, except for appeals against penalty decisions which will be subject to a full merits review.

The UK’s new ex ante digital competition rules do not disapply or displace existing antitrust and merger control laws; rather, they are intended to provide the CMA – and its DMU – with an additional set of statutory powers and tools especially tailored for the digital sector.


The DMCC Act also makes significant changes to the UK’s antitrust and merger control rules. The CMA now has stronger investigatory powers – for example, to conduct domestic dawn raids, access offsite electronic documents and data, and demand information and documents from companies situated outside the UK. These powers are backed up by increased turnover-based fines for procedural breaches.

Maximum fines for failing to cooperate with investigations have increased. Businesses now face fines of up to 1% of their annual global turnover, with additional penalties of up to 5% of daily global turnover for continued non-compliance. Individuals will now also face fines of up to £30,000 and a daily penalty of £15,000.

Businesses that breach commitments or undertakings, directions, orders or interim measures, will face civil penalties of up to 5% of a company’s annual worldwide turnover, plus maximum daily penalties of up to 5% of daily global turnover while non-compliance continues.

The CMA’s extraterritorial jurisdiction has been extended so it can investigate antitrust infringements that cover agreements, decisions, and concerted practices implemented outside of the UK that are “likely to have an immediate, substantial and foreseeable effect on trade within the United Kingdom”, in essence adopting the “qualified effects” doctrine into UK competition law.  The DMCC Act also empowers the CMA to demand documents or information held outside the UK if it relates to suspected infringements in the UK.

Other changes include implementing a more challenging judicial review standard for appeals against CMA interim measures issued in the context of antitrust investigations and giving the Competition Appeal Tribunal jurisdiction to grant declaratory relief and discretion to award exemplary damages - although exemplary damages will not be available in collective proceedings.

In terms of merger control, the DMCC Act makes changes to the jurisdictional thresholds which must be met before the CMA has power to review a UK merger. The UK target annual turnover will increase to £100 million (up from £70 million). An additional jurisdictional threshold has also been introduced enabling the CMA to review mergers where an acquirer has both an existing share of supply of goods or services of 33% or more in the UK or a substantial part of the UK, and an annual UK turnover of £350 million or more where the merger has sufficient connection with the UK. This change is intended to allow the CMA to more readily scrutinise so-called “killer acquisitions”, particularly in the fast-moving technology and pharma sectors, although the new amendment applies to all industry sectors.

A smaller merger “safe harbour” has also been introduced, preventing the CMA from reviewing mergers where each party’s annual UK turnover is below £10 million.

Another notable amendment empowers the UK government to intervene where a foreign power seeks to gain control or influence over newspaper enterprises through an M&A transaction.

The DMCC Act also makes reforms that enable the CMA to use its market study and market investigation powers more flexibly. For example, the CMA will be able to accept binding undertakings from businesses at any stage in market studies and market investigations; in addition, the CMA is given more flexibility when deciding whether or not to make a market investigation reference (“MIR”) under the Enterprise Act 2002. The DMCC Act also implements certain CMA recommendations from the road fuel market study.  Other changes enable the CMA to require businesses to “trial” remedies before their final format is determined and to amend remedies within a 10-year period after a finding of an adverse effect on competition, subject to an initial two-year cooling off period where the CMA cannot itself instigate remedy changes.


Consumer protection law, and particularly the CMA’s power to enforce it, has also seen a major overhaul. The CMA has gained new powers including the ability to determine, without resorting to court proceedings, when consumer protection law has been breached.

The CMA can now fine businesses up to 10% of their global annual turnover for substantive consumer law breaches. This is for infringement of wide-ranging consumer protection laws concerning unfair contract terms in consumer contracts, and various unfair commercial practices.  Individuals who are an “accessory” to substantive infringements by the company may personally face fines up to £300,000.  

Additionally, the CMA may impose turnover-based fines on companies for procedural breaches, such as breaching an undertaking, direction or court order, or refusing to cooperate with a CMA investigation. Notably, individuals may also be fined for procedural breaches in the context of consumer law investigations, potentially facing fines of up to £150,000.

“The DMCC Act also makes certain substantive changes to consumer law, all of which in some way aim to address consumer protection issues that the CMA had examined in the past,” said Angelique Bret, competition law and consumer protection expert at Pinsent Masons.

The new legislation copies across 31 unfair commercial practices from the Consumer Protection from Unfair Trading Regulations 2008 and adds a further new unfair commercial practice, which prohibits “fake consumer reviews”. A commercial practice will likely be unfair if it results in a consumer making a transaction that would otherwise not have been taken as a result of misleading action or omission, an aggressive practice, or a breach of professional due diligence.

Subscription contracts will now be subject to certain pre-contract information requirements, and businesses will be obliged to notify consumers before a free trial or a low-cost introductory offer comes to an end. Businesses will also need to ensure that consumers are able to exit a contract in a straightforward and timely manner.  This rule stems from the CMA’s previous consumer law investigations into auto-renewing subscription contracts.

“Drip pricing”, which occurs when consumers are shown an initial price for a good or service while additional fees are revealed (or “dripped”) later in the checkout process, is expressly mentioned as a prohibited unfair practice under the DMCC Act.  It has been identified as a particular area of concern by the UK government, along with fake reviews. Businesses will have to set out the total, all-inclusive, price of a product at the outset. If this is not possible, the business must clearly explain to consumers how the final total price will be calculated.

Consumer savings schemes will also be subject to greater protection under the DMCC Act. Where consumers make payments as a form of saving for goods, services, or digital content to be supplied by the business at a later date, the business will have to mitigate the risk of potential loss to consumers - in the event the business were to become insolvent - by setting up either an insurance or a trust arrangement.

The DMCC Act also seeks to reduce fraud and excessive mark-ups by ticket resellers in the context of secondary ticketing.  Secondary ticketing has been another focus area for CMA consumer law enforcement in the past.

Bret said: “These changes will significantly impact all businesses which sell to UK consumers, particularly as the DMCC Act now places consumer protection law on a par with competition law in terms of the strength of the CMA’s enforcement powers.  Businesses must quickly get up to speed with these important changes and prioritise developing and deploying internal compliance manuals and training.”

“The CMA has a strong consumer protection enforcement focus and in recent years has opened numerous investigations, particularly in areas such as misleading green claims or “greenwashing”.

Digital markets, online choice architecture and consumer-facing AI are becoming the latest focus area for CMA consumer protection scrutiny.  Unlike the new digital markets competition regime, the CMA’s scrutiny of consumer protection issues in the digital sector will not be limited to SMS firms,” said Bret.

International cooperation, and next steps

The DMCC Act also makes changes to help support international cooperation and information-sharing with other regulatory agencies. This will complement the post-Brexit competition cooperation agreement that is currently being negotiated between the EU and the UK government, and will have implications for future parallel UK and EU competition investigations as well as in relation to the EU’s and UK’s respective ex ante digital competition regimes.

Most substantive provisions of the DMCC Act will come into force on future date(s) that the Secretary of State will specify by regulations. Different provisions may commence at different times. The CMA has already published for consultation draft new guidance on how the new digital markets competition rules will operate and be enforced. 

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