Key Facts

• Amendment 55 proposes inserting a new subsection (5) in clause 2 of the Bill.
• Amendments 56 and 57 propose similar insertions into clauses 13 and 47 respectively.
• The amendments aim to allow the CMA to consider analyses from public consultations conducted within five years prior to the Act's Royal Assent.
• Clause 2 grants the CMA power to designate undertakings with SMS.
• The CMA must look five years ahead to assess market power.
• An undertaking needs £25 billion global turnover or £1 billion UK turnover for SMS status.
• Clause 2 gives the DMU power to designate undertakings with strategic market status (SMS).
• The DMU must satisfy conditions detailed in clauses 3 to 8 before designating a firm.
• Consultations are necessary procedural safeguards for good decision making.
• There may be consideration under clause 7 regarding manipulation of turnover for global undertakings with UK-related turnover approaching £1 billion.
• Amendment 55 would insert a provision allowing SMS investigations to take account of CMA analysis within five years prior to Royal Assent.
• The speaker fears amendment 55 might invite litigation and is not supported.
• Clause 3 defines digital activities crucial for the DMU's regulatory powers.
• Subsection (4) allows the CMA to describe digital activity using brand names or nature of activity.
• Google had over 90% share of UK search advertising market in 2018.
• Meta owns 50% of UK’s digital display advertising space.
• Clause 7 sets out the turnover condition ensuring firms must have a 12-month turnover exceeding £1 billion in the UK or £25 billion globally.
• The DMU can designate an undertaking if its digital activity has a significant number of UK users, operates business in the UK, or has an immediate substantial and foreseeable effect on UK trade.
• The Secretary of State has power to amend the turnover thresholds via regulations subject to affirmative resolution.
• Clause 7 provides the Secretary of State with the power to amend turnover thresholds.
• The DMU is required to keep the thresholds under review and advise the Secretary of State accordingly.
• Clauses 8 to 18 provide details on turnover conditions, estimation methods for global and UK turnovers, and initial SMS investigations.
• Clause 9 sets out circumstances for initiating initial SMS investigations.
• Clause 10 outlines further SMS investigations to review existing designations.
• Designations must be reviewed every five years by the DMU.
• The DMU can open a further investigation at least nine months before the end of a designation period if needed.
• Clause 9 concerns initial SMS investigations.
• Clause 10 provides statutory footing for thorough and suitable CMA investigations and designations.
• Clause 11 is supported but has important amendments tabled.
• Clause 11 establishes transparency in SMS investigations through investigation notices.
• Subsection (5) requires the CMA to publish statements summarizing contents of investigation notices and give copies to specified organizations.
• Clause 12 allows for initial SMS investigations to be closed without a decision under certain circumstances.
• Consultations on decisions resulting from SMS investigations are required but must balance public involvement with timely regulatory action.
• The Government established a digital competition expert panel in 2018 and the DMU was set up within the CMA in 2021.
• Clause 14 outlines actions and decisions by the CMA at the end of SMS investigations, including publishing statements summarizing SMS decision notices.
• Clause 15 sets out requirements for SMS decision notices when designating an undertaking as having significant market power (SMS).
• The designation period is five years under clause 18.
• Amendments 46 to 52 aim to make SMS investigation notices available upon request to any person.
• The Bill already requires the DMU to publish summaries of these notices online.
• Third parties can approach the DMU for more detailed information or use FOI requests.
• Clause 19 enables the DMU to impose conduct requirements on SMS firms.
• Conduct requirements aim to promote fair dealing, open choices, and trust and transparency.
• The DMU can intervene to ensure users have information to make decisions about products and providers.
• The DMU currently has about 70 people.
• The Competition and Markets Authority (CMA) will publish annual reports on its work and decision-making processes.
• The Minister mentions regular meetings between the Department and CMA, as well as with the Digital Markets Unit.
• Amendment 53 aims to prevent designated undertakings from carrying out activities in non-designated areas that would be prohibited under Clause 20.
• Paul Scully expresses concern that the amendment could lead to intervention without proving a link to market power and could harm competition and innovation.
• The Committee divides on both amendments, with Amendment 53 failing by 6 Ayes to 7 Noes and Amendment 58 failing by 6 Ayes to 8 Noes.
• Amendment 58 aims to strengthen protections for news publishers.
• New clause 2 defines 'recognised news publisher' to protect them from discrimination by designated digital services firms.
• Clause 20(3)(a) enables the DMU to prevent discriminatory practices against businesses, including news publishers.
• Clause 20 sets out an exhaustive list of permitted types of conduct requirement.
• The clause reflects insights from the CMA’s market studies and regulatory expertise.
• Conduct requirements address anti-competitive behaviors such as self-preferencing, tying and bundling, and unfair use of data.
• Clauses 21 to 25 set out procedural aspects for conduct requirements.
• Clause 21 requires the DMU to publish notices online as soon as reasonably practicable.
• Clause 22 establishes the DMU’s power to revoke conduct requirements to ensure they remain targeted and proportionate.
• Clause 23 allows for smooth transition periods in implementing or ending conduct requirements.
• Clause 24 mandates public consultation before imposing, varying, or revoking a requirement.
• Clause 25 requires ongoing review of conduct requirements by the DMU.