[co-author: Mo Swart]
The Digital Markets, Competition and Consumers Act (DMCC), which became law on 24 May 2024, represents a major shift in UK digital, competition and consumer protection regulation.
In particular, the DMCC:
- Introduces a new regulatory regime for large digital firms (covered in May 2024 Cooley client alert).
- Significantly widens the enforcement remit of the UK Competition and Markets Authority (CMA) in consumer protection – particularly in relation to online activities.
- Gives the CMA broader powers to review mergers and conduct investigations.
As regards the CMA’s powers in merger and antitrust jurisdictions, the DMCC introduces the following significant changes:
- New merger thresholds. While the UK will continue to operate a voluntary merger control regime, the DMCC introduces the following new jurisdictional thresholds to the existing regime (i) increasing the UK’s turnover threshold from the current GBP £70 million to GBP £100 million (approx. USD$ 125 million); (ii) introducing a new threshold for the CMA to review deals where one transaction party has an existing 33% (or more) share of supply in the UK and UK turnover exceeding GBP £350 million (approx. USD$ 440 million), provided that the other transaction party has a UK nexus (e.g., by virtue of having a legal presence, carrying out activities, and/or supplying goods or services in the UK), thereby eliminating the need for an overlap between merging parties activities in the UK; and (iii) creating a new safe harbour for smaller transactions where each of the parties has UK turnover of less than GBP £10 million (approx. USD$ 12 million)
- Broadened remit for the CMA to investigate and enforce competition law breaches. The DMCC widens the CMA’s dawn raid powers under warrant and broadens its interview powers in antitrust investigations. It also amends the jurisdictional scope of the prohibition against anticompetitive agreements to now also capture agreements outside of the UK, where there is or is likely to be an immediate, substantial and foreseeable effect in the UK.
- Extraterritorial information-gathering powers backed by higher noncompliance penalties. The DMCC expressly provides that information and document requests can be served on companies outside of the UK, where the company is subject to a merger or antitrust investigation, or has a UK connection. The DMCC also increases the penalties the CMA can impose on corporates for failing to respond to information and document requests.
[View source.]
