Digital Markets, Competition and Consumers Bill 2022-23 introduced in the House of Commons

The Digital Markets, Competition and Consumers Bill, Bill 294 of the 2022-23 session, was introduced in the House of Commons on 25 April 2023, according to the House of Commons Library¹. Second reading is scheduled for 17 May 2023¹. The Bill runs to six parts and 26 schedules, and its competition and consumer provisions would extend to the whole of the UK¹.

Part 3 would create two separate regimes for the civil enforcement of consumer protection law, the Library says¹. One is a court-based regime that would simplify and enhance the court enforcement procedure currently provided by Part 8 of the Enterprise Act 2002, and would empower the courts to impose monetary penalties on traders who breach consumer laws or do not comply with an undertaking¹. The other is a direct enforcement regime administered by the CMA, giving it new powers over infringements of certain consumer protection laws, breach of undertakings and non-compliance with CMA directions¹.

Part 4 and Schedules 18 to 24 would revoke the Consumer Protection from Unfair Trading Regulations 2008, retained EU law, and recreate their effect with minor amendments, prohibiting unfair commercial practices in business to consumer relationships¹. The regulations contain a list of banned practices automatically considered unfair; the Bill would largely replicate the list and create a power to make regulations that could add to it¹. The Government has said it would use this power to prohibit fake reviews online and plans to consult on this during the passage of the Bill¹.

The same part would tackle "subscription traps" through new duties on traders, in particular to give specific pre-contract information to consumers, to send reminders before a contract rolls over or auto-renews into a new term, and to ensure consumers have a straightforward, cost-effective and timely mechanism to terminate the subscription contract¹. It would also give new protections to consumers who make advance payments to consumer saving scheme contracts, such as Christmas saving clubs, requiring these businesses to protect payments via a trust arrangement or insurance and to give prescribed information about how payments are protected¹. ADR procedures would be prohibited for consumer contracts where the provider is not accredited or exempt¹.

Part 1 deals with digital markets. It would empower the CMA to "designate" businesses that are very powerful in particular digital activities, giving them strategic market status in relation to those activities, and to enforce conduct requirements on how they treat consumers and other businesses¹. The CMA could impose penalties including fines of up to 10% of a firm's global turnover for breaches, and could resolve payment-related breaches of conduct requirements to deal on fair and reasonable terms with third parties through a "Final Offer Mechanism" as a "backstop" enforcement tool¹. Part 2 would reform aspects of competition law, amending existing UK law on merger control, market inquiries and the cartel offence¹.

Why it matters for households

The consumer provisions are not yet law. They would apply across the UK once commenced, and the Bill's passage through Parliament, beginning with second reading on 17 May 2023, determines whether and when they take effect¹. The changes described would affect how consumer protection law is enforced rather than setting prices or rates: the CMA would gain direct powers to impose monetary penalties for breaches of certain consumer laws, a role previously exercised through the courts¹. For households, the stated targets include subscription contracts that auto-renew, advance payments to saving scheme contracts such as Christmas saving clubs, and online reviews¹. The Bill would also replace the Consumer Protection from Unfair Trading Regulations 2008 with recreated provisions and a power to add to the list of banned practices¹. The Library notes the Government plans to consult on prohibiting fake reviews during the Bill's passage, so the detail of that measure has not been settled¹.

What happens next

Second reading is scheduled for 17 May 2023¹. The Government plans to consult on prohibiting fake reviews online during the passage of the Bill¹. Alongside the Bill, the Government has published Explanatory Notes, a Delegated Powers Memorandum and Impact Assessments¹.