'Pro-competition' rules for Big Tech make it through UK's pre-election wash-up

The U.K. will shortly get its own rulebook for Big Tech, after peers in the House of Lords agreed Thursday afternoon to pass the Digital Markets, Competition and Consumer bill (DMCC) — removing the last obstacle to the bill becoming law in the limited parliamentary time remaining for the government.

The pro-competition reform, which has been on the slate for years, amps up powers available to the U.K.’s competition watchdog, the Competition and Markets Authority (CMA). This reform addresses concerns over tech giants like Apple and Google. As they have become more powerful, the digital markets they dominate maybe have become dysfunctional for competitors and consumers alike.

Penalties in the DMCC can reach up to 10% of global annual turnover, so the incoming law has real teeth. The CMA will also be able to directly impose fines for breaches of consumer law — cases won’t have to go through the courts. So it should speed up enforcement.

Originally proposed by the government back in 2020 — following a 2019 competition market review chaired by former U.S. President Barack Obama’s chief economic advisor, professor Jason Furman — the plan got kicked into the long grass by former prime minister Boris Johnson. Last year, it was revived by current 10 Downing Street incumbent Rishi Sunak, who bolted on a few consumer protection additions.

However, the deeply unpopular sitting PM announced a surprise summer general election earlier this week — putting the bill’s passage in jeopardy. May 30 is the date when the U.K.’s parliament dissolves.

As it turns out, though — in a final, final twist — the DMCC has made it through the “wash-up”. This refers to the last days and hours of parliamentary time before lawmakers leave their seats, so campaigning can begin.

On Thursday afternoon, Politico Pro reported the bill had passed the Lords, as peers rushed through consideration of remaining amendments. It added the bill will get Royal Assent Friday — which will mark the final stage of its journey to the statute books.

One element aiding the DMCC’s swift passage through this final push is the fact that the legislative plan to rein in the market power of Big Tech enjoys widespread support from across the political spectrum. While the legislation was proposed, drafted and introduced under a series of Conservative governments, the opposition Labour Party threw their support behind the bill.

During this afternoon’s debate in the House of Lords, Baroness Jones of Whitchurch, a Labour peer, said: “We believe, overall, it’s a good bill. And it does take the first steps to regulating the behaviour of the Big Tech companies, which is long overdue. And gives a bit of security to the challenger firms and adds protection to consumer rights.”

Speaking for the government, Lord Offord of Garvel, welcomed the bill’s passage: “This bill will be vital in driving growth, innovation and productivity. And protecting consumers.”

“I’m honoured to be seeing it through its final stage today,” he added. “I look forward to becoming an Act of Parliament. The bill has benefited from widespread support from across both houses, as well as detailed scrutiny from many noble Lords and Members in the other place. I wish to thank honourable Lords for supporting our position and wishing the bill well.”

Reached for comment on the bill’s passage, a CMA spokesperson told TechCrunch: “The new powers in this bill step up the CMA’s ability to take on firms that breach consumer law and helps level the playing field between online businesses, ensuring the most powerful digital firms act responsibly to competitors and their customers.”

We understand the CMA will shortly set out next steps for the Digital Markets Unit. This existing unit is the division that’s tasked with devising and applying bespoke rules for the handful of tech giants which are expected to fall under the pro-competition rulebook.

While the DMCC has been likened to the European Union’s flagship competition reform, the Digital Markets Act — which has been up and running since February — there is one big difference. The EU’s approach applies a set of fixed rules to “gatekeepers,” whereas the U.K. law will give the country’s competition enforcer more leeway to design remedies to fit individual platforms.

That element could be particularly important in light of fast-moving developments in platform technology, such as the rise of generative AI — an area the CMA already has in careful focus.

The regulator gave a flavor of its plans for operationalizing the DMCC in January. At the time, it said it expects to undertake three-four investigations of tech giants in the first year to determine whether they meet the law’s bar — so-called “strategic market status” — for the special abuse control regime to apply.

While no names have been confirmed, Apple and Google have long been in the CMA’s cross-hairs over their mobile duopoly — so it looks a sure bet the pair will top its list for assessment.