The UK's and Germany's new competition bills are major steps forwards

April 25, 2023 The UK's and Germany's new competition frameworks are major steps forwards

(Updated from the original, with new links, and Microsoft-Activision.)

The United Kingdom today announced its incoming Digital Markets, Competition and Consumer Bill, which will be a major step forwards in the fight against monopoly, market power and dominance.

The bill has now been published (with supporting documentation here.) The official announcement headlines eye-catching (and important) measures against “rip-offs,” subscription traps and fake reviews. Probably the most significant measure, however, is the long-awaited introduction of a dedicated Digital Markets Unit (DMU) to deal with big tech firms:

  • There will be clear criteria for big tech firms to be designated for special treatment: firms with a global turnover above £25bn, or UK turnover above £1bn, will be designated for Strategic Market Status (SMS), meaning they will be tied to specific standards of conduct, under the DMU.
  • The DMU will be able to fine misbehaving firms up to 10% of global turnover, and to make senior managers personally responsible for ensuring their company complies with DMU requests. Those are real teeth.
  • Updated merger and fine thresholds will make it easier for the Competition and Markets Authority (CMA) to block mergers.
  • Tougher standards of appeal for companies to overcome, making it harder for them to tie regulators down in endless court processes and flim-flammery.

Politico has analysed the progress with the headline “Britain says no to Big Tech as competition bill lobbying falls flat” which gives a good sense that this is no whitewash.

This UK announcement is just the latest step in a legislative and political process: the measures need to be subject to UK parliamentary approval, secondary legislation, and publication of detailed guidance on how it will all work. There is much to play for, and the package is far from perfect – but this is progress.

The UK competition authorities already have a fairly good reputation as robust regulators, internationally – for example, the CMA was the first regulator, anywhere, to break up a big tech firm (in a small way, but still). That particular move, which showed that a smallish country has the power to enforce the global breakup of two U.S. firms, is a reminder that that the UK’s regulatory power in this area can be significant, even globally.

Regulators in different countries are watching each other  – this Bill contains many similarities to the EU’s Digital Markets Act: and the announcement from the UK also comes hot on the heels of a major new competition bill in Germany, which also introduces far-reaching powers over digital giants. More on that soon.

These are all latest sign of a belated recognition that big tech and monopoly power are out of control – and it’s time to get more serious.