We previously reported on the Digital Markets, Competition and Consumers (DMCC) Act when it received Royal Assent earlier this year with a focus on the consumer law implications for software and digital content providers. On 9 September 2024 the Department for Business and Trade issued a statement setting out the Government's plans for implementation of the Act's five Parts between now and spring 2026. This will be a phased implementation incorporating continuing consultation with businesses and consumers intended to allow those affected enough time to prepare.
How is the Act split?
The five parts of the Act are delineated according to their focus areas:
Part 1 will establish a pro-competition regime for digital markets aimed at promoting dynamic markets. This promises to ensure the largest and most influential technology companies conduct their business in a manner that is fair both for consumers and other businesses.
Part 2 outlines various enhancements to the wider competition regime, empowering the Competition and Markets Authority (CMA) with more robust powers to combat illegal, anti-competitive, behaviours. The CMA's focus will purportedly be on regulating areas where potential harm to the market is most significant and its interventions can be the most impactful.
Part 3 will bolster enforcement of consumer laws by giving the CMA new powers to enforce consumer law directly as well as via the courts, including the ability to impose fines.
Part 4 introduces new consumer protections, including repealing the Consumer Protection from Unfair Trading Regulations 2008 and reinstating them with some minor changes (these rules control unfair commercial practices by traders towards consumers). There will also be new rules on fake reviews and drip pricing tactics as well as new rules for consumer saving schemes and a new regime relating to subscription contracts.
Part 5 encompasses a variety of miscellaneous measures including provisions aimed at assisting overseas regulators with investigations, the disclosure of information to international counterparts, and imposing a duty of expedition on the CMA and sectoral regulators. Additionally, the CMA will receive new information-gathering powers to support its role in monitoring competition within the UK's retail motor fuel sector
Implementation timeline:
Autumn 2024: Secondary legislation and CMA guidance laid before parliament for scrutiny before coming into force
In the Autumn, secondary legislation to commence parts 1, 2 and 5 shall be laid before Parliament, this is required before these measures can commence and enter into force in December or January (see below). The Secretary of State for Business and Trade must approve new CMA digital markets guidance, to be put in place as soon as possible, which the Government promises will be detailed, robust and clear.
December 2024 - January 2025: Parts 1, 2, and 5
The digital markets regime will come into effect with the commencement of part I. The Government has said it expects the first CMA Strategic Market Status investigations to be launched soon afterwards. The reforms to the existing competition regime, the new motor fuels function and other part 5 measures will also take effect on the commencement date. The commencement order will be made at least 28 days before the commencement date.
April 2025 onwards: Part 3 and part 4
The CMA's new direct enforcement powers are set to commence from April 2025, as well as the updated unfair commercial practices regime. The savings schemes rules will not commence before April 2025 (subject to continuing engagement with consumers and industry) with reforms to alternative dispute resolution (ADR) following later as well as subscription contract reforms which will not commence before Spring 2026 at the earliest (see below). The aim of this staged rollout is to deliver reforms as quickly as possible whilst allowing for proper consultation.
Spring 2026 onwards: Subscription reforms
Subscriptions reforms will be the last to be implemented and are not set to commence until Spring 2026, at the earliest.
What steps should you be taking in preparation for each phase of implementation?
You may have already begun preparations for the DMCC Act's incoming effects on your business. Now, with the additional clarity on the implementation timetable provided by the Government's statement, you should be able to put in place more precise plans to ensure compliance. We recommend the following approach to ensure your business is compliant with new rules and able to take advantage of new opportunities:
- Now: Stay informed and plan ahead
Businesses should have a clear plan to review and update their policies and procedures, and to train staff. Businesses should set reminders to check for any updates from the Government and actively engage with any consultation or guidance programs.
- Before December 2024: Review investigation
Ensure information sharing and other policies relating to regulatory investigations are updated and compliant with the requirements under Part 5. You should carefully review all the miscellaneous provisions in Part 5 to ensure your business is compliant.
- Before April 2025
Ensure procedures to mitigate any potential consumer losses are in place. ADR procedures in consumer contracts must also be reviewed and updated to ensure recommended ADR providers are accredited or exempt under requirements as stated in the Act.
- Before February 2026: Review and update subscription terms and management processes
Ensure sales terms for any subscription-based products have been updated to include the right to cancel during a cooling-off period and systems are in place to deal with the increased notification obligations with regard to consumer subscription contracts.