Digital Markets, Competition and Consumers Act
Coming into effect over the course of 2025 and 2026, the DMCCA is set to reshape the landscape for businesses of all sizes, introducing new obligations, enhanced oversight, and stricter penalties for non-compliance.
Whether your focus is compliance with the SMS regime, adapting consumer-facing practices, or engaging with the Competition and Markets Authority (CMA) as a result of its enhanced powers, the DMCCA will require a proactive and strategic approach.
Our team of regulatory experts is here to help you understand the implications of this complex legislation, with guidance that is tailored to your business model and sector.
A cornerstone of the DMCCA is the creation of the Strategic Market Status (SMS) regime, aimed at regulating large digital platforms with entrenched market power in the UK.
Key features include:
- Tailored codes of conduct: SMS firms will need to comply with tailored rules promoting fair trading, open choices, and transparency. Breaches could result in fines of up to 10% of global turnover.
- Mandatory merger reporting: SMS firms must notify the CMA of transactions exceeding £25 million, creating stricter scrutiny of acquisitions.
- Pro-competition interventions (PCIs): SMS firms may be subject to these measures aimed at addressing root causes of entrenched market power, including data-sharing interventions, fair access requirements and even separation remedies.
The DMCCA seeks to create a more competitive and transparent digital ecosystem.
What should you do next?
The CMA has already embraced its digital markets powers by launching SMS investigations. As part of this process, businesses can expect to receive requests for information and will have opportunities to respond to any consultations. Companies potentially affected by the regime will want to prepare in advance of anticipated SMS investigations and appoint relevant expert advisers (such as economists, data scientists etc) to support submissions as appropriate. Building relationships with the leading experts can be key to providing timely and robust responses – please do ask us how we can support you in compiling a first class team.
Useful guidance
The DMCCA introduces significant reforms to consumer protection law, imposing new obligations on businesses that interact with consumers and introducing direct enforcement powers for the CMA.
Key developments include:
- Direct enforcement powers: the CMA will, for the first time, have the power to fine traders if the CMA determines that there have been consumer law infringements. The maximum fine is significant: 10% of a group’s global annual turnover, bringing the CMA’s enforcement powers into line with the powers it has for competition law infringements.
- Subscription contracts: New rules will require businesses to provide detailed pre-contract information, implement 14-day cooling-off periods on annual renews, send multiple reminder notifications, and ensure cancellation processes are straightforward and do not involve any unnecessary steps.
- Drip pricing: Businesses will have to include the total price (inclusive of all charges, unless they cannot be calculated at that stage) in all invitations to treat. Any hidden fees revealed later in the customer journey are prohibited.
- Fake reviews: The DMCCA bans commissioning, publishing, or failing to address fake or misleading reviews. Platform operators will need to take “reasonable steps” to prevent such practices.
What should you do next?
The direct enforcement powers for the CMA are coming into effect in April 2025. B2C businesses should assess their existing levels of compliance with consumer law – the risk analysis for non-compliance is shifting with the CMA soon to be able to fine businesses for non-compliance. Any changes required should be made before April 2025 as the CMA cannot use its new powers for actions prior to that date.
In addition, certain types of B2C businesses should also assess their practices against the new obligations introduced by the DMCCA. Businesses that include customer reviews on their digital platforms, rely on different charges as part of an overall purchase, and businesses that offer auto-renewing subscriptions, should all assess what changes they may need to make. Once any changes are determined, they are likely to require more than just legal changes, involving technical and operational work streams that can have long lead times.
Useful guidance
- Direct consumer enforcement guidance (CMA200con)
- Consumer protection: enforcement guidance (CMA58ii DRAFT)
- Unfair commercial practices (CMA 207)
The DMCCA strengthens the UK competition regime with updates to merger control thresholds and new tools to address anti-competitive behaviour.
What’s changing?
- Merger control thresholds:
- Turnover thresholds rise from £70m to £100m.
- A new acquirer-centric threshold captures transactions involving firms with a 33% UK market share and £350m UK turnover where the target has a UK nexus.
- A new small-mergers exemption applies to transactions where both parties have UK turnovers under £10m.
- Turnover thresholds rise from £70m to £100m.
- Antitrust rules:
- The CMA’s jurisdictional reach is formalised as extending to anti-competitive agreements implemented outside the UK if there are foreseeable UK effects.
- Investigative powers are enhanced, with stricter evidence preservation requirements and covering documents held outside the UK.
- The CMA’s jurisdictional reach is formalised as extending to anti-competitive agreements implemented outside the UK if there are foreseeable UK effects.
- Increased penalties: Non-compliance fines now reach up to 1% of global turnover, while breaches of undertakings or orders can result in fines of up to 5% of global turnover.
These updates make for a more rigorous regulatory landscape for businesses, particularly for those operating across borders.
What should you do next?
Businesses should reflect on the revised thresholds as the new acquirer-centric threshold potentially captures more deals and it is currently unclear to what extent the CMA will enforce its jurisdiction. The latest developments on the political stage should also be kept under constant review to determine how the CMA will focus its energies, given it has been tasked by its new interim Chair to make rapid decisions. The CMA wants to make the UK a “a brilliant place to invest, and to drive the productivity, growth and prosperity we all want to see.”
Useful guidance
The DMCCA includes updates to the existing UK Mergers regime and a new mandatory notification requirement for SMS companies:
