UK Digital Markets, Competition and Consumers Act Comes into Force

The United Kingdom's Digital Markets, Competition and Consumers Act 2024 received Royal Assent on 24 May 2024, giving the Competition and Markets Authority (CMA) new powers to regulate firms with Strategic Market Status (SMS) and to police subscription and fake-review abuses directly. The Act formalizes the Digital Markets Unit (DMU), letting it set tailored conduct requirements for dominant digital platforms, impose pro-competition interventions, and levy fines of up to 10% of global turnover for breaches. Consumer provisions mandate easier subscription cancellations, clearer pre-contract disclosures, and bans on commissioning fake reviews, expanding the CMA's toolkit beyond doings and court orders. This full legislation positions the UK as a leader in digital markets regulation alongside the EU's Digital Markets Act and emerging frameworks in other jurisdictions.

Legislative Context and Objectives

The DMCC Act culminates years of policy development following the Furman Review's recommendations on competition in digital markets and the Penrose Review on consumer protection. The legislation addresses concerns that existing competition law tools were inadequate to address entrenched market power in digital markets where network effects, data advantages, and ecosystem lock-in create barriers to competitive entry.

The ex-ante regulatory approach through the Strategic Market Status regime complements traditional ex-post competition enforcement by establishing rules before harm occurs rather than pursuing remedies after market failures manifest. Consumer protection provisions address practices that existing legislation did not adequately cover, particularly around subscription services and fake reviews that undermine informed consumer choice.

Strategic Market Status Designation

The DMU can designate firms meeting revenue thresholds and demonstrating significant and entrenched market power as Strategic Market Status entities, then impose conduct requirements covering self-preferencing, interoperability, data use, default settings, and reporting. SMS designation requires that the firm have UK turnover exceeding £1 billion or global turnover exceeding £25 billion, and that the firm have significant and entrenched market power in a digital activity with strategic significance to the UK.

The DMU must consult with designated firms and consider representations before making final determinations. Once designated, firms face tailored conduct requirements addressing specific competition concerns identified in their markets. Conduct requirements may address a wide range of behaviors including terms applied to business users, access to data, interoperability obligations, and restrictions on using market power across related activities.

Pro-Competition Interventions

Following investigations, the DMU may require structural or behavioral remedies—such as data separation, interoperability mandates, or user choice screens—to address entrenched market failures. Pro-competition interventions represent more intrusive measures than conduct requirements, applicable where conduct requirements alone cannot address identified adverse effects on competition.

Investigations must follow statutory procedures including evidence gathering, provisional findings, and response opportunities before final intervention decisions. Remedies can mandate changes to business practices, technology setups, or organizational structures that open markets to competition. Appeals lie to the Competition Appeal Tribunal on judicial review grounds, providing designated firms procedural protections while enabling timely regulatory action.

Consumer Protection Reforms

Businesses must present key subscription information upfront, send renewal reminders, enable single-step cancellations, and refrain from helping or soliciting fake reviews. The subscription provisions address dark patterns and practices that make signing up easy but cancelling difficult, trapping consumers in recurring payment arrangements they struggle to exit. Pre-contract information requirements ensure consumers understand subscription terms, pricing, and renewal conditions before committing.

Renewal reminders alert consumers before automatic renewals occur, enabling informed decisions about continuing or cancelling. Single-step cancellation requirements ensure that ending subscriptions is as easy as starting them, eliminating multi-step processes designed to discourage cancellation. Fake review provisions prohibit commissioning fake reviews, hosting fake reviews without reasonable steps to prevent and remove them, and offering incentives for positive reviews without adequate disclosure.

Enforcement Powers and Penalties

The CMA gains improved enforcement powers including ability to impose administrative fines directly without court proceedings for consumer protection violations. Fines for SMS conduct requirement breaches can reach 10% of global turnover, with daily penalties up to 5% of daily global turnover for continuing violations.

Consumer protection penalties include fines up to 10% of global turnover and up to £300,000 for individuals. The CMA can accept binding commitments from firms, providing flexibility for negotiated resolutions while maintaining enforcement credibility. Enhanced investigatory powers enable the CMA to gather information efficiently and pursue cases without lengthy court procedures that allowed harmful practices to continue during litigation.

Schedule and deadlines

Different provisions come into force at different times, with SMS regime provisions requiring secondary legislation and CMA guidance before full operation. Consumer subscription and fake review provisions have earlier setup timelines. Businesses potentially subject to SMS designation should engage with CMA consultations on guidance and prepare compliance capabilities. Subscription-based businesses should audit current practices against new requirements and implement compliant cancellation processes. Organizations operating review platforms or soliciting customer reviews should review practices against fake review prohibitions and develop compliance protocols.