The Digital Markets, Competition and Consumers Act 2024 (DMCCA) is a notable reform to UK competition and consumer law, enacted in 2024 and introduced in phases. It strengthens competition in digital markets, enhances consumer protection, and gives the Competition and Markets Authority (CMA) expanded enforcement powers.
While our June newsletter focused on consumer protection, this edition looks at the competition law perspective. We discuss the DMCCA’s key provisions, SMS obligations, tougher merger control, implications for overseas companies, and recommended compliance strategies.
Overview of the DMCCA
The DMCCA represents a major shift in how UK competition law is enforced, with new powers aimed squarely at large digital platforms. It gives the CMA stronger tools to regulate powerful platforms, scrutinise mergers, and address unfair business practices. Implementation will take place throughout 2025 and 2026, meaning businesses should begin preparing now for the new requirements.
SMS obligations for large digital platforms
A central feature of the Act is the Strategic Market Status (SMS) regime. The CMA can designate a digital platform with entrenched market power and strategic importance in the UK as SMS. Only very large firms qualify, typically with over £25 billion global turnover or £1 billion UK turnover. Once designated, SMS companies face tailored conduct rules to ensure fair dealing, transparency and open choices. Breaches can lead to fines of up to 10% of global turnover, and the CMA may also impose pro-competition measures such as interoperability obligations.
Tougher merger control rules
The DMCCA significantly expands the CMA’s merger review powers. A new threshold allows the CMA to review transactions where one party has at least a 33% UK share of supply and turnover of £350 million, even if the other party has only a small UK presence.
In addition, SMS firms must report qualifying transactions above £25 million that involve UK operations. These measures aim to prevent so-called “killer acquisitions” and will require businesses, including overseas investors, to factor in additional time and cost when planning UK-related deals.
Compliance risks for overseas companies
The DMCCA has clear implications for overseas businesses:
- Large platforms operating in the UK could be designated as SMS, requiring changes to data, advertising, or commission policies.
- Exporters, e-commerce companies, and game operators selling to UK consumers must meet stricter consumer standards, including transparent pricing and fair subscription terms.
- Foreign investors acquiring UK businesses may face extended review processes, and failing to comply with notification obligations could result in substantial penalties.
Overseas companies engaging with the UK market should assess their risk exposure and ensure their practices are aligned with UK law.
Recommended response strategies
To prepare, businesses should:
- Seek legal advice on SMS designation criteria and CMA enforcement priorities.
- Review internal policies, ensuring transparency in advertising, pricing, and data usage.
- Audit contracts and terms to ensure compliance with UK consumer law.
- Incorporate M&A due diligence and competition clearance planning into deal structures.
How 3CS can help
The DMCCA is complex, but 3CS can help you understand and manage its impact. Our experienced team of commercial lawyers advise on SMS designation risks, contract compliance, and merger control requirements.
If you would like to discuss how the DMCCA may affect your business, please get in touch with your usual 3CS contact. We are here to help you stay compliant and competitive.
