What is the DMCC Act?

Quick Answer: The DMCC Act (Digital Markets, Competition and Consumers Act 2024) is UK legislation that reforms competition law, strengthens consumer protection, and gives the Competition and Markets Authority (CMA) new powers to regulate the most powerful digital platforms. For businesses, the most immediate practical implications sit in the consumer protection provisions, which introduce stricter rules on fake reviews, subscription traps, and drip pricing that apply across sectors well beyond tech.

What is the DMCC Act?

The Digital Markets, Competition and Consumers Act received Royal Assent on 24 May 2024. It is the most significant overhaul of UK competition and consumer protection law in over two decades, updating a framework that had largely been in place since the Enterprise Act 2002 and the Competition Act 1998.

The legislation has two distinct pillars. The first creates a new regulatory regime for the largest digital platforms, giving the CMA powers to designate certain firms as having Strategic Market Status (SMS) and impose binding conduct requirements on them. The second updates consumer protection law in ways that affect a much broader range of businesses, including rules on subscription contracts, fake reviews, and hidden fees.

Coverage of the Act often conflates these two pillars. For most businesses outside the largest tech platforms, the consumer protection reforms are the more immediately relevant part.

What is Strategic Market Status, and which businesses does it affect?

Strategic Market Status is a formal designation the CMA can apply to a firm that holds a strategic position in a digital activity. To qualify for designation, a firm must have a UK turnover exceeding £1 billion, or global turnover exceeding £25 billion, and the CMA must determine that the firm has substantial and entrenched market power in a specific digital activity.

The SMS designation process works as follows:

1. The CMA opens an investigation into whether a firm meets the criteria for a specific digital activity (for example, operating a mobile app store or a general search engine).
2. The investigation runs for up to nine months, with a possible three-month extension.
3. If the CMA designates the firm, it can impose conduct requirements (things the firm must or must not do) and pro-competition interventions (structural or behavioural remedies to address market distortions).
4. Designated firms have the right to appeal to the Competition Appeal Tribunal.

The SMS regime explicitly targets a small number of very large platforms. Commentators most commonly cite Apple, Google, Meta, and Amazon as likely early candidates for investigation. Businesses outside this category are not subject to SMS obligations, though changes to how dominant platforms operate may affect them indirectly if the regime takes hold.

What do the consumer protection reforms mean in practice?

The consumer protection provisions of the DMCC Act apply far more broadly than the SMS regime. They update and strengthen the rules that businesses across all sectors must follow when selling to consumers.

The key changes include:

• Subscription contracts. Businesses must provide clearer pre-contract information, send reminder notices before a free trial or introductory period converts to a paid subscription, and make cancellation straightforward. Consumers gain a right to exit subscriptions that do not meet these requirements.
• Fake reviews. The Act makes it an offence to commission fake reviews or to publish consumer reviews without taking reasonable steps to verify their authenticity. This applies to any business that hosts or publishes consumer reviews.
• Drip pricing. Mandatory fees that are unavoidable must appear in the headline price shown to consumers. Businesses cannot add compulsory charges at the checkout stage that were not disclosed upfront.
• CMA enforcement powers. The CMA gains the ability to enforce consumer protection law directly, without needing to go through the courts. It can impose fines of up to 10% of global annual turnover for breaches.

These changes affect e-commerce businesses, subscription-based services, ticketing platforms, and any company that collects or displays consumer reviews. Individual provisions commence on a staggered basis, so businesses should check which rules are already in force and which have a later implementation date.

How does the DMCC Act change the CMA's enforcement powers?

The Act significantly expands what the CMA can do and how quickly it can act. Previously, enforcing consumer protection law required the CMA to seek a court order, which added time and cost to investigations. Under the DMCC Act, the CMA can make its own infringement decisions and impose financial penalties directly.

The penalty structure is substantial:

• Breaches of SMS conduct requirements: fines of up to 10% of global annual turnover, with daily penalties of up to 5% of daily global turnover for ongoing non-compliance.
• Consumer protection breaches: fines of up to 10% of global annual turnover or £300,000, whichever is higher.
• Providing false or misleading information to the CMA: fines of up to 1% of global annual turnover.

The CMA also gains stronger investigatory powers, including the ability to interview individuals and require the production of documents more efficiently than under the previous regime.

What should businesses do now?

The practical steps depend on which part of the Act applies to your business.

For businesses subject to potential SMS designation, the priority is monitoring CMA investigation activity and taking legal advice on compliance with any conduct requirements that may follow designation. The CMA has indicated it intends to open its first SMS investigations promptly.

For businesses more broadly, the consumer protection reforms require a review of:

• Subscription sign-up and cancellation flows, to confirm they meet the new disclosure and exit requirements.
• Review collection and display practices, to assess whether current processes satisfy the fake reviews provisions.
• Pricing presentation, particularly for businesses that add booking fees, service charges, or other mandatory costs after the initial price appears.

The DMCC Act does not require businesses to overhaul their operations overnight, but the CMA's new direct enforcement powers mean that non-compliance carries a more immediate financial risk than it did under the previous framework. Building a compliance review into existing legal and operational processes now is more efficient than responding to an investigation later.