Digital Markets, Competition and Consumers Bill: call for written evidence

Aims of the Bill

The Bill consists of six parts and 26 schedules. As a whole, the Bill can be seen as covering two large topics: digital markets and proposed competition law reforms (Parts 1 and 2 of the Bill); and proposed reforms of consumer law enforcement and new consumer rights (Parts 3 and 4 of the Bill).

A key focus of the Bill is the Competition and Markets Authority (CMA). An independent non-ministerial government department, the CMA is the UK’s principal competition and consumer protection authority.

The proposals in Part 1 of the Bill, dealing with digital markets would seek to:

• Empower the CMA to “designate” businesses (known as “designated undertakings”) that are very powerful in particular digital activities, giving them strategic market status in relation to those activities.
• Ensure that designated undertakings comply with rules on how they treat consumers and other businesses in relation to the activities for which they have strategic market status.
• Give the CMA powers to address the root causes of competition issues in digital markets.
• Require designated undertakings to be more transparent about mergers which pose risks to competition.
• Allow the CMA to enforce obligations on designated undertakings and impose penalties including fines of up to 10% of a firm’s global turnover for breaches.
• Empower the CMA to resolve payment-related breaches of conduct requirements to deal on fair and reasonable terms with third parties, through a ‘Final Offer Mechanism’ as a “backstop” enforcement tool.

Part 2 would reform aspects of competition law by amending existing UK law on merger control, market inquiries and the cartel offence. The Bill would also make amendments to enhance the investigative and enforcement powers for the UK’s competition regime.

Part 3 would create two separate regimes for the civil enforcement of consumer protection law to protect the “collective interests” of consumers:

• A court-based regime which would simplify and enhance the court enforcement procedure currently provided by Part 8 of the Enterprise Act 2002. It would empower the courts to impose monetary penalties on traders who breach consumer laws or do not comply with an undertaking.
• A direct enforcement regime administered by the CMA. The CMA would be given new powers in respect of infringements of certain consumer protection laws, breach of undertakings and non-compliance with CMA directions. The CMA would be empowered to directly enforce consumer law through the imposition of monetary penalties.

Part 4 would:

• Revoke the Consumer Protection from Unfair Trading Regulations 2008 (CPR) (retained EU law) and recreate their effect, with minor amendments, prohibiting unfair commercial practices in business to consumer relationships. Broadly, this would encompass misleading actions, omissions or aggressive practices relating to the marketing and sale of products to consumers. The CPR contain a list of specific banned practices, that are automatically considered unfair. The Bill would largely replicate this list and create a power to make regulations that could add to it.
• Tackle “subscription traps” by introducing new rules to impose duties on traders. Such duties include to give specific pre-contract information to consumers, to send reminders to consumers before a contract rolls over or auto-renews into a new term, and to ensure that consumers have a straight-forward, cost-effective, and timely mechanism to terminate the subscription contract.
• Give new protections to consumers who make advance payments to consumer saving scheme contracts (e.g. Christmas saving clubs). The Bill would require these businesses to protect payments via a trust arrangement or insurance and give prescribed information to consumers about how their payments are protected.
• Prohibit alternative dispute resolution (ADR) procedures for consumer contracts where the provider is not accredited nor exempt. The Bill makes provision for accreditation and exception, related requirements, and enforcement.

The Bill’s competition and consumer provisions would extend to the whole of the UK.

Follow the progress of the Digital Markets, Competition and Consumers Bill

The Digital Markets, Competition and Consumers Bill was introduced in the House of Commons on 25 April 2023. Second reading was held on 17 May 2023.

• Bills before Parliament: Digital Markets, Competition and Consumers Bill
• Read Explanatory Notes: Digital Markets, Competition and Consumers Bill
• Library Briefing Papers:
  • A first, focusing on digital markets and proposed competition law reforms (Parts 1 and 2 of the Bill); and
  • a second, focusing on proposed reforms of consumer law enforcement and on new consumer rights (Parts 3 and 4 of the Bill).

Oral evidence sessions for this Bill are expected to be held on 13 and 15 June.

Guidance on submitting written evidence

Deadline for written evidence submissions

The Public Bill Committee is now able to receive written evidence. The sooner you send in your submission, the more time the Committee will have to take it into consideration and possibly reflect it in an amendment. The order in which amendments are taken in Committee will be available in due course under Selection of Amendments on the Bill documents pages. Once the Committee has dealt with an amendment it will not revisit it.

The first sitting of the Public Bill Committee is expected to be on Tuesday 13 June and the Committee is scheduled to report by Tuesday 18 July. However, please note that when the Committee concludes its consideration of the Bill it is no longer able to receive written evidence and it can conclude earlier than the expected deadline of 5.00pm on Tuesday 18 July. You are strongly advised to submit your written evidence as soon as possible.

Your submission should be emailed to scrutiny@parliament.uk

Further guidance on submitting written evidence can be found here.

Image: Parliamentary Copyright