DMCC and DMU: Impact on Your Business and Market Regulation
New regulations for digital markets are set to come into force, including changes to competition and consumer protection laws. The UK government recently introduced the draft Digital Markets, Competition & Consumers Bill (DMCC).
The DMCC will establish a specialised regulator called the Digital Markets Unit (DMU) within the Competition and Markets Authority (CMA). In this article, we will explore what this might mean for you and your business.
Firstly, what are Digital Markets?
Digital Markets are defined as “markets where businesses develop and apply new technologies for the benefit of other businesses and consumers”.
Examples include social media platforms such as Meta (Facebook) and Twitter, online marketplaces like eBay and Amazon, and tech-driven firms like Alphabet (Google) and Apple.
What is the DMCC?
On the 25th of April 2023, the UK Government finally unveiled the draft Digital Markets, Competition & Consumers (DMCC) Bill. This bill will make the Digital Markets Unit (DMU) an official regulatory body for digital markets and establish new rules for how these markets operate.
This legislation includes several important updates to competition law, such as:
New merger thresholds;
CMA will have more tools for investigations; and
Stronger consumer law powers.
These new regulations are expected to come into force by October 2023.
What is the objective of the DMCC?
The DMCC itself will be a pro-competition regime for digital markets. The UK government aims to achieve two key objectives through the bill:
Address market power issues and boost competition, which will lead to improved consumer outcomes such as better quality services, more choices for consumers, increased innovation, lower prices, and improved privacy protections.
Drive growth across the economy by unlocking the benefits of dynamic competitive digital markets.
What is the Digital Markets Unit (DMU)?
The Digital Markets Unit (DMU) has been operating within the Competition and Markets Authority (CMA) on a non-statutory basis since April 2021.
This specialist DMU was established to regulate digital markets and create fairer competition within this sector.
The DMU has been tasked to oversee a new regulatory regime promoting competition and innovation in the digital market.
Importantly, the DMCC Bill will make the DMU a statutory body, meaning it will be an official and legally recognised body with defined powers and responsibilities.
What is the primary objective of the DMU?
To increase competition in the digital market by imposing greater regulation on firms with great market power and large market shares. This could level the playing field for startups and small businesses, helping them to compete more fairly against powerful tech giants.
Click here to read the UK Government’s press release about the DMU and its objectives.
Author: Natalie Achou -
Author: Natalie Achou -
In partnership with
DISCLAIMER
This article has been written by law students for the sole purpose of providing informative insight. The information in this article is intended for educational purposes only and does not constitute legal advice, nor should the information be used for the purpose of advising clients. You should seek independent legal advice before relying on any of the information provided in this article.
Sources
Coadec, 'An Investor Perspective' (The Digital Markets Unit: On the Side of Startups? , September) <2021> accessed 25 July 2023
Nayantara Ravichandran, 'What does the new regime mean for investments in UK tech companies?' (DMU Insights #6: , 1st June) <https://techinsights.linklaters.com/post/102ifto/dmu-insights-6-what-does-the-new-regime-mean-for-investments-in-uk-tech-compani> accessed 25 July 2023
Verity egerton-doyle, 'Tech Insights' (The (not so) new frontier: long-awaited digital, competition and consumer law reforms finally reach the UK Parliament, 26th April) <https://lpslivecms.linklaters.com/en/insights/blogs/linkingcompetition/2023/april/the-not-so-new-frontier_long-awaited-digital-competition-and-consumer-law-reforms> accessed 25 July 2023
