The UK government has confirmed plans for implementing the Digital Markets, Competition and Consumers Act 2024.
What's the issue?
The Digital Markets, Competition and Consumers Act 2024 (DMCCA) was rushed through the 'wash up' period shortly after the announcement of the July general election. Much of the Act must be brought in by secondary legislation. While the Conservative government had provided indications as to the implementation timetable, the change in government led to renewed uncertainty.
What's the development?
The current government has now said it hopes to introduce Parts 1, 2 and 5 of the DMCCA in December 2024 or January 2025. The government intends to publish the required secondary legislation and approve required CMA guidance on how it will carry out its functions as soon as possible.
The CMA carried out a consultation on its draft statutory direct enforcement guidance and rules over the summer. These set out how the CMA proposes exercising the powers it will acquire under the DMCCA. The CMA asked for views on proposals relating to:
- Responding to enforcement notices – responses likely to be required between 20-30 days.
- When undertakings will be accepted – the CMA is more likely to accept those which can be implemented quickly and effectively.
- Proposed arrangements around settlement – likely to result in discounts of fines by 20-40%.
- What amounts to a reasonable excuse for non-compliance – eg force majeure.
- Arrangements for monetary penalties – the CMA's starting point will usually be 30% of UK turnover up to the cap of 10% of annual global turnover.
The consultation closes on 11 September 2024. Once final guidance is published, the Secretary of State will be able to consider it for approval.
Commencing Part 1 of the DMCCA will bring the digital markets regime into effect, while Part 2 enhances the UK's wider competition regime and gives the CMA greater powers. The CMA is expected to launch its first Strategic Market Investigations shortly after commencement and there will be at least 28 days between the commencement order being made and the commencement date itself.
The government expects to commence Part 3 (consumer enforcement) and Part 4 Chapter 1 (which replaces the unfair trading regulations) in April 2025. Secondary legislation will set out rules for the CMA's new direct enforcement powers alongside guidance. Reforms to subscription contracts and ADR will follow later and subscription reforms will not commence before Spring 2026 at the earliest.
What does this mean for you?
It is helpful to have clarity on the implementation timetable, particularly as it is in line with the previous government's intentions so there are no huge surprises. In particular, those businesses offering subscription contracts will continue to have until at least Spring 2026 to prepare for the incoming changes.
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