The Digital Markets,
Competition and Consumers Bill has been
referred to a Public Bill Committee. As part of the scrutiny of
the Bill, the Committee is now inviting those with an interest to
submit their views in writing.
A Public Bill Committee is a committee set up by the House of
Commons to examine the details of a particular Bill. You can find
out more about them on the website here.
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.
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 Thursday 18 July.
Those with relevant expertise and experience or a special
interest are strongly advised to submit written evidence as soon
as possible.
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.
