17 Nov 2022

Digital markets regime given go-ahead in the UK

The British Government announced on 17 November 2022 that the Digital Markets Unit (“DMU”) legislation will be brought before Parliament during this session, meaning that its proposals to regulate Big Tech will now progress quickly. The legislation will set out the legal framework for the new regime and it can tentatively be expected to become law by mid-2023. After that, the DMU will write the detailed rules that will apply to the designated companies. Up to now, the EU’s Digital Markets Act (“DMA”) has been ahead of the UK’s version in terms of timing. However, the different procedural framework for the DMU when compared to the DMA means that London’s timings could potentially catch up with Brussels when it comes to deciding what all these new regulatory concepts will mean in practice.  Interested parties will want to carefully review the draft legislation when it is published in early 2023.

Amazon is expected to be among the companies designated as having “strategic market status” and therefore it will be subject to a legally binding set of rules about how it conducts its business.  Each such company will receive its own bespoke rules, which are not yet written. The DMU, which already exists as a division of the Competition and Markets Authority (“CMA”), will be conducting research and analysis ahead of drafting these rules. Interested parties will be invited to contribute their views on the issues raised by e-commerce and there will be a series of public consultations as the regime progresses towards being in force.

Separately, the CMA also has an ongoing investigation into Amazon’s use of data, which was launched in July 2022. The investigation concerns the way that non-public third-party seller data may be used within Amazon’s retail business, how Amazon sets criteria selecting which product offer is placed within the ‘Buy Box’ and which sellers can list products under Amazon’s ‘Prime label’ on its Marketplace in the UK. The case is similar to the European Commission’s case that is expected to result in some legally-binding commitments, but the CMA has not yet consulted publicly on its proposed outcome. It may or may not come to the same conclusion. If it proposes remedies, third party sellers and other stakeholders will want to carefully analyse them and provide their views to the CMA. Any remedies may ultimately be folded into the DMU’s rulebook.

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