A new UK law passed last week could empower regulators to directly fine Big Tech businesses without needing court approval.
Last week, the UK government passed the Digital Markets, Competition and Consumer Bill (DMCC), which will enable the UK's Competition and Markets Authority (CMA) to fine tech businesses substantial sums if they don’t abide by new regulations intended to encourage competition in digital markets.
The law will empower the CMA to determine if a company has violated regulations, mandate compliance, and impose fines without resorting to the court system. The CMA can penalise companies with fines of up to 10 percent of their global revenue for breaching the new rules.
The UK parliament described the bill:
The Digital Markets, Competition and Consumers Bill will create a regime to empower the Competition and Markets Authority (CMA) to regulate and increase competition in digital markets. The bill also updates powers to enforce competition law and resolve consumer disputes, and protects consumers from unfair commercial, subscription, prepayment and saving schemes."
Also falling under the DMCC's remit is consumer protection, which it intends to address by mandating certain companies to report mergers to the CMA, banning fake reviews, regulating secondary ticket sales, increasing transparency in subscription contracts, and eliminating hidden fees.
Organisations with Strategic Market Status (SMS) will have to comply with the DMCC. SMS businesses are required to have a global revenue exceeding £25 billion or UK revenue surpassing £1 billion and are characterised by "substantial and entrenched market power" and hold a "position of strategic significance".
The DMCC is similar to the EU's Digital Markets Act (DMA), which came into effect last year and also enforced requirements for "digital gatekeepers" — such as Meta, Google, Amazon and Apple — to comply with practices that encouraged market competition. However, the DMCC offers more specific requirements that each SMS organisation will have to address than the more blanket regulations of the DMA.
Microsoft Under The Legal Microscope
Regulators are currently scrutinising Microsoft for several reasons.
The troika of the UK's CMA, EU's European Commission, and the US’s Federal Trade Commission (FTC) are all examining Microsoft's relationship with OpenAI, if not having announced formal investigations already.
