Britain could impose heavy fines on big tech companies if they don't comply with new rules designed to boost competition in digital markets. Lawmakers on Thursday passed the Digital Markets, Competition and Consumer Bill (DMCC) through Parliament, which will allow regulators to enforce the rules without the help of the courts.
The DMCC also addresses consumer protection issues by banning fake reviews, requiring companies to be more transparent about subscription agreements, regulating secondary ticket sales and eliminating hidden fees, and it will require certain companies to file merger reports with the UK Competition and Markets Authority (CMA).
Only companies that the CMA has designated as having Strategic Market Status (SMS) are required to comply. These SMS companies are described as companies that have “strong and established market power” and a “strategically significant position” in the UK. These companies must have global revenues of more than £25 billion, or UK revenues of more than £1 billion.
The Act gives the CMA the power to determine whether a company has broken the law, require compliance, and impose fines, all without going through the courts. The CMA can impose fines of up to 10% of a company's total worldwide revenue on companies that breach the new rules.
If this all sounds familiar, it's because the European Union has enacted a similar law called the Digital Markets Act (DMA), which sets out blanket requirements for companies considered digital “gatekeepers,” such as Apple, Google, Meta, Amazon, etc. However, unlike the DMA, the DMCC offers a more tailored approach to the requirements that each SMS company must meet.
Some companies, including Spotify and Epic Games, have long called for government intervention to combat App Store fees charged by companies like Apple. In a post published following the passing of the DMCC, Spotify said the UK should act to regulate Apple's practices. “Apple has spent millions of dollars across borders to try to circumvent and mock laws like the DMCC,” Spotify CEO Daniel Ek said in a statement. “The DMCC has the potential to unleash real competition and growth, and Apple must be held accountable in the UK, because we cannot afford to miss the opportunity to get it right.”
Apple has faced criticism over its response to the DMA, and the European Union has already launched an investigation to assess whether the company is complying with the region's new rules.
