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Report: Consumers ‘at risk’ if Digital Markets Unit not given teeth, say MPs

25 October 2022

A new report by MPs on the influential Business, Energy and Industrial Strategy Committee has urged the Government to publish a draft Digital Markets Bill that would help deter predatory practices by big tech firms ‘without delay’.

Proposals for a Digital Markets Competition and Consumer Bill were trailed by the Government in the Queen’s Speech. It announced measures that would empower the Competition and Markets Authority’s (CMA) Digital Markets Unit (DMU) to rein in abusive tech giants by dropping the turnover threshold for immunity from financial penalties from £50 million to £20 million, and hiking potential maximum fines to 10% of global annual income.

The Committee concluded that fines have been viewed as ‘a small business cost’ by large companies, adding that there is ‘strong evidence of abuses of market dominance’ within digital markets. It warned that ‘consumers and others are at risk’ until a Bill is published and passed.

Chair's comments

BEIS Committee Chair Darren Jones said:

“The Competition, Consumer and Digital Markets Bill has wide support and should be prioritised, especially given the difficulty the Government currently has at passing other laws which are more controversial. There are many areas in the economy where stronger competition is required in the interests of consumers, small business and economic growth and this bill is an essential stepping stone to driving this issue forward.”

The report also called on the Government to ‘end [the] uncertainty’ caused by its failure to publish final guidance on the post-Brexit subsidy control regime, which the Committee found had left subsidy awarding bodies ‘in limbo’. The guidance needs to be published as soon as possible, MPs said.

Passed in April, and due to come into full force in early January, the Subsidy Control Act omits key details of the regime for public authorities to follow when awarding money. These gaps are due to be filled in by final guidance, which authorities will need if they are to have confidence when preparing bids for funding from the Shared Prosperity Fund. The Fund is a replacement for money formerly awarded through EU structural funding.

Mr Jones added: “The Government promised to replace previous EU funding into projects across the country as part of its Brexit and levelling up offers to the public. This has not yet been delivered and without full guidance and proper financing of the new subsidy schemes, funds that help deliver projects will be further delayed. 

“The public will no doubt be disappointed to have not yet seen the so called ‘Brexit opportunities’ that were promised to level up their local community.”

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