Digital Markets, Competition and Consumers Bill: Lords stages and amendments

The Digital Markets, Competition and Consumers Bill 2023-24 was introduced to the House of Commons on 25 April 2023. A Government Bill, it was carried over from the 2022–23 session. On completing all stages in the Commons, the Bill passed to the House of Lords on 22 November 2023.

As originally drafted, the Bill was structured in six parts:

• Part 1 would create a new regime to increase competition in digital markets by conferring powers and duties on the Competition and Markets Authority (CMA) to regulate competition in these markets.
• Part 2 would update powers to investigate and enforce competition law.
• Part 3 would update and enhance powers to investigate and enforce consumer protection law and resolve consumer disputes.
• Part 4 would give consumers protections in respect of unfair commercial practices, subscription traps, prepayments to savings schemes and ADR schemes.
• Part 5 would enable provision of investigative assistance to overseas regulators.
• Part 6 would make general provisions.

Progress in the Lords

Second reading of the Bill took place in the House of Lords on 5 December 2023. There was broad cross-party support for the aims of the Bill.

Lords committee stage took place over six sittings between 22 January 2024 and 7 February 2024. Lords report stage took place over two sittings on 11 and 13 March 2024.

Part 1: Digital Markets

Amendments to part 1 of the Bill included:

• Limiting the basis upon which digital companies could appeal against fines made by the CMA (clauses 89 and 103)
• Removing an explicit reference to the CMA’s conduct requirements and pro-competition interventions needing to be proportionate, which was seen as also offering digital companies more legal routes to challenge the CMA’s decisions (clauses 19 and 46)
• Reverting to the Bill’s original wording on a clause requiring the CMA to close conduct investigations where it believed countervailing benefits outweighed any anti-competitive behaviour (clause 29)
• Requiring the Government to approve the CMA’s guidance on how it plans to exercise its powers, within 40 days (clause 114)

These amendments largely reversed changes made by the Commons at report stage.

The Lords also passed a Government amendment to remove a Henry VIII power to change, by regulations, the criteria to designate a firm as having significant market status, and so falling within the CMA’s new remit (clause 6).

Part 2: Competition law & mergers

The main amendment to part 2 of the Bill removed clause 126 which partly dealt with the fallout from the Supreme Court’s judgment in the PACCAR case.

The impact of this judgment was to reduce the viability of using third-party funding to fund litigation in collective action cases (such as the case taken by sub-postmasters against the Post Office). The Government amendment was passed without division as the Government said it would bring separate legislation to deal with the issue more comprehensively (the Litigation Funding Agreements (Enforceability) Bill).

Amendments to the consumer parts, and remaining parts of the Bill included:

Part 3: Enforcement of consumer law

• Government amendments would enable all public designated enforcers to apply to the court for online interface and interim online interface orders and would extend the power of the CMA to give directions to other public enforcers (clauses 159 to 168).
• Technical Government amendments were concerned with prescribed penalty information (clause 157); information to accompany orders or notices imposing monetary penalties (clause 202), and investigatory powers (Schedule 16).

Part 4: Consumer rights and disputes

Protection from unfair trading (Chapter 1):

• A Government amendment would add various activities relating to online fake reviews to the list of banned commercial practices in Schedule 19.
• Government amendments would add provisions to the Bill to address drip pricing (clause 228).

Subscription contracts (Chapter 2):

• A Government amendment to the consequential power in clause 331 would enable the Treasury to amend the gift aid rules in the Income Tax Act 2007.
• Government amendments to Schedule 21 would provide that a contract for the supply of foodstuffs delivered to the consumer’s home would be excluded from the subscription contract provisions if the trader’s business were a “micro-entity”, regardless of whether the business was incorporated or not.
• Government amendments would enable a consumer to exercise a right to end a subscription contract, cancel for breach of an implied term, or cancel during a cooling off period, by notifying the trader by any clear statement of their decision (clauses 258, 261 and 262).
• A Government amendment to clause 265 would state explicitly that the regulatory power in clause 266(1)(a) may be used to introduce a waiver from cooling-off rights if the consumer chooses to receive digital content or services under the contract during that period.
• A Government amendment to clause 265 would make it clear that the power under clause 266(1)(b) may be used to provide that a consumer may lose their right to a full refund if they cancel during a cooling-off period, for example where they have received digital content or services during that period.

Consumer savings schemes (Chapter 3)

• A Government amendment would clarify independence requirements for trustees overseeing funds in a consumer savings scheme, strengthening safeguards against potential conflicts of interest (clause 285).
• A Government amendment would broaden the definition of insolvency for the purposes of Chapter 3 (clause 283).

ADR for consumer disputes (Chapter 4)

• There were technical Government amendments to clauses concerned with accreditation or variation of accreditation for ADR providers.

Secondary ticketing (new Chapter 5)

• A new chapter 5 was added to Part 4 of the Bill, the result of a division on an amendment tabled by Lord Moynihan (Con) on report. This new chapter accommodates new clause 309, which would provide for additional requirements on secondary ticketing facilities.

Part 5: Provision of investigative assistance

• Technical Government amendments to Schedule 26 were concerned with information that comes to a public authority in connection with the exercise of its functions under Part 5 of the Bill and its public disclosure (pursuant to section 237 of the Enterprise Act 2002).

Part 6: Commencement and interpretation

A group of technical or consequential Government amendments were agreed on Part 6.

Third reading

The Bill had its third reading on 26 March 2024.

On the Bill’s competition provisions (Part 2) the Lords passed a significant Government amendment to ban the foreign state ownership or influence over print newspapers and magazines. This followed an attempt to take over the Telegraph Media Group by a UAE-backed firm.

On the Bill’s consumer protection provisions (Parts 3 to 5), there was only one amendment. This was an agreed Government amendment to clause 257 concerned with subscription contracts and the sending of reminder notices.

Publications

The Bill, together with its Explanatory Notes, is available on the Parliament website.

Policy background to the Bill as it was introduced in the House of Commons is provided in two separate briefings:

• Digital Markets, Competition and Consumers Bill 2022-23: Digital markets and competition provisions (PDF) (12 May 2023).
• Digital Markets, Competition and Consumers Bill 2022-23: Consumer provisions (PDF) (17 May 2023).

A summary of what happened to the Bill during the Commons second reading and committee stage is also provided in two separate briefing:

• Digital Markets, Competition and Consumers Bill 2022-23 : Digital markets and competition: Progress of the Bill (PDF) (8 September 2023).
• Digital Markets, Competition and Consumers Bill 2022-23: Consumers: Progress of the Bill (PDF) (15 November 2023).

The House of Lords Library briefing on the Bill also provides an overview of the stages in the Commons, Digital Markets, Competition and Consumers Bill : HL Bill 12 of 2023–24 (PDF) (30 November 2023).