UK's digital markets bill could "cost consumers billions" and harm business investment

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The UK’s proposed Digital Markets, Competition, and Consumers Bill (DMCC) could cost consumers up to £160 billion and have a serious detrimental impact on businesses across the country, critics have warned.

Research from Europe Economics, commissioned by the Computer & Communications Industry Association (CCIA), found that the legislation, currently being considered in the House of Lords, could impose large costs on both consumers and businesses.

UK consumers and businesses are likely to receive poorer services as a result of the legislation, the CCIA study found, and the UK could become a less attractive destination for investment.

Earlier this month, the Competition and Markets Authority (CMA) set out its plans for implementing the bill, which is set to apply to firms designated as having ‘Strategic Market Status’ in relation to one or more digital activities.

If it finds that businesses are using their status to gain an unfair competitive advantage, the CMA said it will take action to prevent them from preferencing their own products and services, require them to allow the products and services of other firms to work with their own, or order them to trade on fairer terms or increase transparency.

"Competitive digital markets are a key driver for investment and innovation, supporting the growth of the UK economy, and bringing huge benefits to UK businesses and consumers," claimed CMA chief executive Sarah Cardell.

However, the CCIA report suggested that without proper procedural checks and balances, premature or overly-broad regulation could delay the introduction of new services and deter investment in new digital networks.

"The new digital markets bill risks undermining the interests of UK consumers and businesses, who have benefited so much from access to cutting edge digital services," said CCIA UK senior director Matthew Sinclair.


A blur CGI render of the Earth, with a view of Europe and North Africa. Around the globe, a series of data points representing telecommunications networks are dotted and connected with blue lines.

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"Without the right checks and balances in place, we risk premature or overly-broad regulation that would deter investment and create all kinds of practical obstacles to innovation."

Over a ten-year period, the analysis found, there's likely to be a net present value impact on consumer welfare resulting from delays of between £55 billion and £160 billion, with the figure reaching between £8 billion and £35 billion a year by year 10.

The report also found there would be a loss in investment in digital services of between 4-8%.

These costs, it said, could be mitigated through restraint in the way the bill is implemented, including ensuring that the impact on consumers is fully considered at each stage of the process, allowing greater consideration of merits in appeals and managing the extent of conduct requirements.

"The new bill could undermine the dynamism that digital markets have shown in recent years by making it harder for technology companies to launch new networks, or improve the services consumers already know and love," Sinclair said.

"Policymakers need to consider these risks carefully, and ensure that the right amendments are in place so the UK does not give up its hard-won reputation for careful and proportionate regulation."

Emma Woollacott

Emma Woollacott is a freelance journalist writing for publications including the BBC, Private Eye, Forbes, Raconteur and specialist technology titles.