The Digital Markets, Competition, and Consumers Act – how will this affect your business?
James Pruden
Managing Director at Xigen, Business Investor, Digital Expert & Entrepreneur.
It can often be hard to keep up to date with the policies and rules the government push out.
For example, did you know that according to the Licensing Act, it’s illegal to be drunk in a pub?
(You might want to think twice before having that final pint of Staropramen!)
However, it’s important to keep up to date with some rules and regulations, especially when they might affect your business. The Digital Markets, Competition, and Consumers Act is a recent piece of legislation that it’s worth knowing the ins and outs of.
Never heard of it? Consider this your three-minute primer.
What is the Digital Markets, Competition, and Consumers Act?
The Digital Markets, Competition and Consumers Act (DMCC) is, in its own words: “a bill to provide for the regulation of competition in digital markets.”
It amends the Competition Act (1998) and the Enterprise Act (2002) to take how businesses use digital marketing, advertising, and websites into account.
The DMCC has been a long time in the making, originally mentioned in 2018 and consulted on in 2021.
The bill was first introduced to the House of Commons in April 2023 and received royal assent in May 2024, meaning it officially became law. However, it’s not expected that the new regulations will take full effect until spring 2026.
The DMCC will give new powers to the Competition and Markets Authority (CMA), which investigates businesses that break competition law and reviews proposed mergers and acquisitions. ?
The CMA and its Digital Markets Unit (DMU) will be able to decide whether laws have been broken rather than having to take cases to court. The CMA and DMU will also be able to impose fines and force businesses to right any wrongs.
Trading Standards departments across the UK will also have more power and will be able to impose fines.
How does the Digital Markets, Competition, and Consumers Act affect my business?
You can break the DMMC into three parts.
Here’s how each part might affect how you do business.
1. It regulates powerful tech companies
The CMA will regulate large tech companies with ‘strategic market status,’ or SMS. This is essentially a business with a lot of market power and a lot of money, like Apple, Samsung, or Meta.
These companies will need to adhere to a code of conduct, report all acquisitions to the CMA, and handle user data in a specific way.
2. It promotes fair competition
The DMMC aims to make it easier for new businesses to enter the marketplace and compete with well-established competitors.
So, for example, Android users could be encouraged to download their apps from a choice of different app stores, rather than being pushed to use the Google Play Store.
3. It protects consumers
The DMMC offers additional protection to consumers. This means:
The DMMC also will prohibit fake and misleading consumer reviews. The US passed a law banning them in August, so these regulations will bring us in line with our American counterparts.
What penalties are there for breaking the rules?
The CMA will be able to enforce penalties of up to 10% of a business’s annual turnover or ￡300,000, whichever is larger.
However, these penalties will likely be reserved for larger businesses that have made significant errors.
In conclusion
It’s still early days for the DMMC, so it will be interesting to see how the government implements the act.
The best thing you can do if you’re a small business is to review how you offer products and services. Make sure your processes are transparent, and make it as easy as possible for customers to cancel – they shouldn’t have to spend two hours on the phone.
Want to stay up to date with the latest marketing and eCommerce regulations? I regularly post on LinkedIn. Check out my previous articles, or click the bell in my profile to get notified when I release new content!