UK Passes Digital Markets Bill Setting Big Tech Rules

The House of Lords passed the Digital Markets, Competition and Consumer Bill (DMCC), clearing the last hurdle for it to become law, the UK will soon have its own regulations for Big Tech

The long-awaited pro-competition reform enhances the authority of the Competition and Markets Authority (CMA), the competition overseer in the United Kingdom. This reform aims to mitigate apprehensions regarding technology behemoths like Google and Apple. The digital markets they have come to dominate may have become dysfunctional for both competitors and consumers as their influence has grown.

The potential fines of up to 10% of global annual turnover stipulated in the DMCC give the impending legislation substantial force. In addition, the CMA will have the authority to levy penalties directly for consumer law violations; no recourse will be given to the courts. It should, therefore, expedite enforcement.

After a competition market review in 2019 presided over by Professor Jason Furman, the former chief economic adviser to U.S. President Barack Obama, the government launched the scheme in 2020, but former Prime Minister Boris Johnson ultimately abandoned it. Rishi Sunak, the incumbent at 10 Downing Street, revived the initiative a year ago with a few consumer protection amendments.

Nonetheless, earlier this week, the profoundly unpopular incumbent prime minister declared an unexpected general election for the summer, jeopardizing the bill’s passage. May 30 marks the date of the dissolution of the British parliament.

However, in a shocking and conclusive development, the DMCC has completed the “wash-up.” This pertains to the final days and hours of the parliamentary session before members vacate their seats to commence campaign activities.

Politico Pro reported Thursday afternoon that the measure had passed the House of Lords as peers hurriedly reviewed the remaining amendments. In addition, it was stated that the bill will receive Royal Assent on Friday, signifying the conclusion of its voyage to the statute books.

A factor contributing to the DMCC’s expeditious advancement during this concluding phase is the broad support that the legislative proposal to limit the market dominance of Big Tech has garnered across the political spectrum. Despite being proposed, drafted, and introduced during a succession of Conservative administrations, the measure received the backing of the opposition Labour Party.

During the House of Lords debate this afternoon, Baroness Jones of Whitchurch, a Labour peer, stated: “In general, we hold the view that the measure is satisfactory. And it does initiate the long-overdue process of regulating the conduct of the largest technology companies. It also enhances consumer rights and provides a measure of security for challenger firms.

Lord Offord of Garvel, speaking on behalf of the government, applauded the passage of the measure: “This bill will be indispensable in fostering innovation, productivity, and growth. Additionally, safeguarding consumers.”

He stated, “I am honored to witness it in its final stages today.” “I eagerly anticipate being enacted as an Act of Parliament.” The measure has garnered extensive support from members of both houses. It has been subjected to meticulous examination by a considerable number of noble Lords and members of the other place. I appreciate the honorable Lords’ support of our position and their good wishes for the bill.

A CMA spokesperson who was contacted for comment on the bill’s passage stated to TechCrunch: “By ensuring that the most powerful digital firms act responsibly toward competitors and their customers, the new powers in this bill help level the playing field between online businesses and increase the CMA’s ability to take on firms that violate consumer law.”

As far as we know, the CMA will outline the Digital Markets Unit’s next measures soon. The division responsible for formulating and implementing specific regulations for the limited number of technology behemoths that are anticipated to be included in the pro-competition rulebook is this existing unit.

While the DMCC has been compared to the centerpiece competition reform of the European Union, the Digital Markets Act—which went into effect in February—distinguishes itself significantly. In contrast to the EU’s approach, which imposes a predetermined set of regulations on “gatekeepers,” British law allows the competition enforcer to tailor remedies to specific platforms.

This aspect may become especially critical considering rapid advancements in platform technology, such as the emergence of generative AI — a domain that the CMA is already diligently examining.

In January, the regulator provided an overview of its strategies for implementing the DMCC. It stated then that it anticipates conducting three to four investigations of tech titans in the first year to determine whether they satisfy the legal requirement of “strategic market status” to be subject to the special abuse control regime.

Although no specific names have been confirmed, the CMA has consistently scrutinized Apple and Google due to their dominant position in the mobile industry. Therefore, it is highly probable that these two companies will be at the forefront of its evaluation criteria.