Businesses of all sizes may be affected by the upcoming Digital Markets, Competition and Consumers (DMCC) Bill.
While much of the attention has fallen on the DMCC Bill’s lot of attention attempt to tackle the Big Tech power of multinational enterprises, the bill will also affect SMEs in the UK, particularly in relation to its consumer-centric measures.
The bill places the onus squarely on businesses to protect customers’ data and transparently outline the sales and marketing tactics that they use. It also gives regulators much more power to safeguard the protection of consumer rights.
Introduced to the UK parliament on 25 April 2023, the DMCC bill is set to pass into law early in 2024, according to Eversheds Sutherland.1
The bill addresses three main areas:
While the tighter control, enforcement and compliance requirements of consumer protection measures will affect SMEs directly, there are also concerns that the bill’s Big Tech competition rules will filter through and impact them.
As reported by TechUK, the UK boasts the world’s third-largest tech sector, which is worth more than £182 billion to its economy each year. Of this, SMEs contribute £101.7 billion, which is 56% of the total.2
There is understandable concern that the proposed regulation of Big Tech companies could, if not implemented carefully, have unintended consequences for the whole digital economy.
More directly, the bill’s provisions will affect all SMEs selling or marketing online, through stricter compliance requirements surrounding consumer rights.
Those who understand and implement these new compliance requirements will be in a better place to secure better ongoing customer relations. Meanwhile, those who do not meet the demands could risk sanctions, fines and the loss of trust in their business.
The bill aims to make notable changes to the UK's consumer law, strengthening legal protection and granting new powers and enforcement abilities to the Competition and Markets Authority (CMA).
At present, the CMA’s only recourse to action has been via the courts. Now, it will be able to issue fines directly in the event of consumer law breaches.
These fines can be as much as 10% of a company’s global annual turnover for breaches of consumer law, and 5% of this for breaches of CMA directions or non-compliance.
For small businesses, this means that a much stricter watch is going to held over their compliance with data and consumer protection laws. This is why it is critical that SMEs in the digital space understand what these new laws are and implement changes that will ensure compliance.
The DMCC bill introduces stricter regulations in digital markets, including identifying acceptable digital marketing practices.
These include further provisions related to data privacy and consumer protection that will affect the way that businesses collect and use data, target their advertising, and apply algorithms for personalisation. Here are some aspects that could have a direct impact:
At the heart of the bill is a consumer-centric approach to businesses operating in the digital economy. It encourages a greater need for transparency and honesty, with the onus now on businesses to actively ensure such values are central to their operations and marketing.
There are many ways that SMEs can implement practices that foster such values within the fabric of their business. A few that all businesses can review are:
The DMCC bill demands a sharper focus on the use of consumer data and the placing of customer rights and experience at the centre of service provision. This is introduced alongside tighter rules and the equipping of a regulator with new enforcement capabilities.
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