Digital Markets, Competition and Consumers Act 2024
Overview
The Digital Markets, Competition and Consumers Act 2024 represents a significant legislative milestone for the United Kingdom, marking a robust step towards reshaping the regulatory landscape of digital markets. This Act aims to curtail the monopolistic dominance of major tech giants, foster a fairer competitive environment, enhance consumer protections, and ensure the sustainability of market dynamics in the digital era. As technology continues to evolve rapidly, this legislation provides a framework to address emerging challenges and balance interests among stakeholders.
The Digital Markets, Competition and Consumers Act 2024 updates and expands the UK’s approach to digital market oversight, incorporating lessons learned from earlier regulatory attempts both domestically and abroad. The Act establishes new standards and practices specifically designed to manage the complexity and influence of large digital platforms, ensuring they do not misuse their market power to the detriment of competition and consumers.
The key requirements of the Digital Markets, Competition and Consumers Act 2024 include:
- Strategic Market Status (SMS) Framework:
- The Act introduces a classification for firms with ‘Strategic Market Status’—those possessing significant, enduring market power in digital markets. Firms designated as SMS are subject to stringent regulatory oversight.
- SMS firms must comply with specific codes of conduct that prevent them from leveraging their market power unfairly, promoting transparency, fairness, and responsiveness to consumer needs.
- Consumer Protection Enhancements:
- The legislation bolsters consumer rights specifically in digital contexts, ensuring clear information, transparency in pricing, and fairness in contracts.
- New measures facilitate easier comparison, choice, and switching between digital services, empowering consumers to make informed decisions and promoting competitive pricing.
- Data Mobility and Interoperability:
- To encourage innovation and allow new entrants to compete more effectively, the Act mandates improved data portability and interoperability among digital platforms.
- These provisions help break down barriers that previously hindered competitors and restricted consumer choice, promoting a more dynamic market environment.
- Regulatory Powers and Penalties:
- The Digital Markets Unit (DMU), operating under the Competition and Markets Authority (CMA), is empowered to enforce the Act, with the ability to impose significant penalties for non-compliance.
- Senior managers in SMS firms can be held personally accountable for failing to meet regulatory requirements, emphasising the seriousness of the obligations.
The Digital Markets, Competition and Consumers Act 2024 was published on the 24th of May 2024 and applies to the United Kingdom.
Does the Digital Markets, Competition and Consumers Act 2024 affect my business?
The Act significantly affects various types of businesses:
- Large Tech Companies: Primarily impacts major platforms with SMS designation. These companies will need to undertake comprehensive reviews of their business practices and align their operations with the new regulations.
- Small and Medium Enterprises (SMEs): Stands to benefit from a more equitable market environment where barriers to entry and competition are reduced. SMEs in the tech sector, in particular, may find new opportunities for growth and innovation.
- Consumer-Facing Businesses: All businesses engaging with consumers digitally need to enhance their transparency and compliance in line with strengthened consumer rights provisions.
- New Entrants: Start-ups and new market entrants might find it easier to break into the market due to provisions that curb the monopolistic practices of established giants. The emphasis on interoperability and data portability could significantly benefit new players aiming to offer alternative or supplementary services to those of the dominant firms.
The Digital Markets, Competition and Consumers Act 2024 sets a new precedent for digital regulation, reflecting a sophisticated understanding of the digital economy’s nuances and its central role in modern life. As the digital landscape continues to evolve, this legislation provides a critical framework for promoting fair competition, protecting consumers, and fostering innovation. For businesses, adapting to this new regulatory environment will be crucial for their continued growth and success in the digital marketplace.
Do I need the Digital Markets, Competition and Consumers Act 2024 in my ISO Compliance Register?
Virtually all sectors operating within the digital space could feel the effects of this Act, from e-commerce platforms and social media companies to cloud services and app developers. The act also touches on ancillary services linked to digital markets, such as advertising networks, online payment services, and tech infrastructure providers.
Therefore, if your business utilises digital services or technology then we strongly recommend adding this to your ISO Compliance Register.
Legislation related to the Digital Markets, Competition and Consumers Act 2024
Legislation related to the Digital Markets, Competition and Consumers Act 2024 include:
- Digital Economy Act 2010
- Digital Services Act 2024
- Consumer Protection Act 1987
- Consumer Rights Act 2015
- Consumer Protection Act 2007 (Competition and Consumer Protection Commission) Levy Regulations 2024
More information
Visit the Digital Markets, Competition and Consumers Act 2024 article on the legislation.gov.uk website.
Create an account in the ISO Compliance Register App and add this article to your Register.
