THE UK Government published its Digital Markets, Competition and Consumers Bill earlier this year in an effort to arm the UK Competition and Markets Authority (CMA) with new powers to regulate digital markets and those companies who operate in that sphere.
The chief executive of the CMA has described this as a “flagship bill” which will likely be a “watershed moment” in competition regulation in the UK.
The bill is intended to regulate competition in digital markets. The bill is now in its report stage in the House of Commons where amendments are proposed, and its third reading is scheduled.
Once passed, the CMA will have the benefit of new enforcement powers to impose further regulation for digital markets and the businesses that operate within them in the interests of consumers. This is an area that businesses operating in the consumer and digital market sphere should already be considering.
Under the new bill, the CMA would have the power to directly impose fines where provisions of competition law have been breached, fines can be up to 10% of the offending company’s worldwide turnover and in the case of breaches of orders and commitments given to the CMA, up to 5% of daily worldwide turnover for each day a breach continues.
The bill also bolsters the CMA’s powers to impose penalties by introducing fixed penalties of up to 1% of a business’ annual turnover for failing to comply with an information request or other investigative notice, for concealing, destroying or falsifying evidence or for providing false or misleading information to the CMA.
These are significantly tougher penalties, and the CMA is armed with much more extensive investigative scope. The bill is intended to allow the CMA to act more quickly in investigations, and to impose remedies and sanctions in a much more rapid manner.
The bill also introduces a new merger control which will encompass more transactions and bring them into the remit of the CMA’s powers of review.
The new digital markets regime will take account of the interaction between the new CMA powers and the existing functions of other regulators that have a role to play in digital markets.
We can expect to see more co-ordination between the CMA and the competitive functions of the Financial Conduct Authority, the Office of Communications and the Information Commissioner.
The result will be a need for businesses to think of competition laws and consumer protection laws in a more comprehensive and integrated manner rather than as an after-thought.
:: David Black is dispute resolution partner at Arthur Cox