DMCC Act Receives Royal Assent, Giving the CMA New Digital Powers

The government said in its announcement that the Act will give the CMA tools to stop technology businesses with strategic power from misusing their position to the disadvantage of competitors and consumers.

Digital markets regime

Under the new regime, the CMA can designate a firm as having strategic market status in relation to a digital activity following an investigation. Only firms above a turnover threshold are eligible: under section 7 of the Act, the CMA must estimate that the undertaking's or group's global turnover exceeds £25 billion, or its UK turnover exceeds £1 billion, in the relevant period. The government expects only a handful of the most powerful global technology companies to be designated.

Once a firm is designated, the CMA can set tailored conduct requirements that require it to change the way it operates if it is not treating users fairly, and can make interventions to boost competition, for example for people using smartphones or businesses relying on cloud services. The government says firms that fail to comply with CMA decisions could face fines reaching tens of billions of pounds, balanced by checks and balances on the regulator.

Consumer protection changes

The Act allows the CMA to enforce consumer law directly and creates new penalties for traders that break it. Businesses will have to give consumers clearer information before they enter a subscription contract, remind them when a free or low-cost trial is ending and make it easy to leave. Unavoidable hidden fees must be included in the initial price or clearly shown at the start of the purchasing journey, and fake reviews are banned. The CMA also gains powers to monitor road fuel prices.

What happens next

Many provisions do not take effect on Royal Assent and will be brought into force by regulations. The CMA will need to publish guidance and decide which digital activities to investigate first. Large technology groups should assess whether they are likely to meet the strategic market status thresholds, while consumer-facing businesses across sectors should review subscription journeys, pricing displays and review management ahead of commencement.

Sources

• GOV.UK: Digital Markets, Competition and Consumers Act receives Royal Assent
• legislation.gov.uk: Digital Markets, Competition and Consumers Act 2024
• legislation.gov.uk: DMCC Act 2024, section 7