The House of Lords Communications and Digital Select Committee has set outs its recommendations on the Digital Markets, Competition and Consumers Bill.
Its recommendations follow a short inquiry during which the Committee heard evidence from consumer groups, UK tech start-up, big tech firms, the Competition and Markets Authority and ministers.
The Committee welcomes the Digital Markets Bill, saying its objectives are sounds and its measures proportionate, but stresses that timely implementation is crucial as the UK is falling behind the EU in regulating the digital space that there is insufficient competition in digital markets and successful implementation of the Bill will help UK businesses to thrive and ensure consumers benefit from more choice and lower prices. The Committee urges the UK government to pursue swift passage of the Bill through Parliament.
It has written to Kemi Badenoch as Business and Trade Secretary, setting out some areas where further action would be beneficial, alongside recommendations to resist pressure to weaken some of the Bill’s measures.
Judicial review
The Committee concluded that the balance of evidence clearly shows judicial review is the appropriate standard for appeals against CMA regulatory decisions and should not be changed to full merits appeals or Judicial Review.
The Committee heard wide-ranging evidence to suggest a full merits or “judicial review plus” system would undermine the viability of the proposed regulatory regime and incentivise big tech firms to take an adversarial approach to the regulators. It would also slow down the regulatory approach fit for an increasingly fast-changing digital world. The Committee says the judicial review standard in the Bill ‘must be maintained’ and the government should resist any move to change to a full merits process.
Countervailing benefits
The countervailing benefits clause in the Bill provides a defence to a firm accused of breaching the rules if it can show its actions provide a significant consumer benefit.
Some concerns have been raised that this will give big tech firms a loophole to avoid compliance with competition regulations. Others argued that the test for application of this exemption was set suitably high and would not be regularly used. The Committee concludes that the exemption is a ‘proportionate backstop’ as long as the threshold for its use remains high, and the UK government should resist proposals to lower that threshold.
CMA accountability
The CMA is receiving substantial new powers: transparency and accountability will be crucial in ensuring public and industry confidence in its work. The Committee calls on the CMA to be proactive in ensuring its new powers are accompanied by clear and open communication with relevant businesses and organisations affected by its work. The Committee also says it expects the UK parliament to play a key role in keeping the work of the CMA under review and holding its leadership to account.
The Bill continues to pass through parliament.
