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Digital Markets, Competition and Consumers Bill - Sitting 8

22 June 2023

Proposing MP
Paul Scully Con
Sutton and Cheam
Type
Public Bill Committee

At a Glance

Issue Summary

The statement discusses an amendment to include pro-competition order directions as related requirements under the Digital Markets, Competition and Consumers Bill. The statement addresses amendments to clauses in the Digital Markets, Competition and Consumers Bill to clarify and strengthen penalties for non-compliance by Strategic Market Status (SMS) firms. The statement discusses amendments related to penalties for non-compliance with digital market regulations. Paul Scully discusses the Digital Markets, Competition and Consumers Bill, focusing on penalty limits for breaches of the regime and the power to update these penalties.

Action Requested

Paul Scully proposes an amendment (Government amendment 25) to ensure that nominated officers are responsible for directions issued in relation to a Pro-Competition Order. He also supports clauses 81 and 82 which require designated undertakings to assign senior managers as 'nominated officers' to monitor compliance with specific regulatory requirements, and submit detailed compliance reports to the Digital Markets Unit.

Key Facts

  • Government amendment 25 seeks to correct the list of “related requirements” in clause 81.
  • The amendment ensures nominated officers will be responsible for directions issued under a Pro-Competition Order (PCO).
  • Clause 81 requires SMS firms to assign nominated officers for each conduct requirement, PCO or commitment made in lieu of a PCO.
  • Government amendment 26 replaces wording in clauses 83 and 86.
  • For conduct requirement breaches, the DMU can fine up to 10% of worldwide turnover.
  • For breach of remedies, penalties are up to 5% daily worldwide turnover plus fixed penalty up to 10%.
  • Senior liability for provision of information helps embed a culture of compliance in SMS firms.
  • Clause sets out that the Competition and Markets Authority (CMA) can impose monetary penalties of up to 10% of worldwide turnover for certain breaches.
  • The CMA has discretion to choose between fixed penalties, daily-rate penalties, or both, depending on the nature of the breach.
  • Maximum fixed penalty on an undertaking is up to 1% of worldwide turnover; maximum daily rate penalty is up to 5% of daily worldwide turnover.
  • For individuals, the fixed penalty is up to £30,000 and daily penalty is up to £15,000.
  • The onus is on SMS firms to prove they have a reasonable excuse for committing a breach.
  • Penalty limits can be updated using powers under the Enterprise Act 2002.
  • Proposed changes will be published online as soon as practicable.
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