Mobile App Competition Bill Fast-Tracked Through U.K. Parliament

The U.K. Parliament has passed the Digital Markets, Competition and Consumers Bill, rushing it through before the country goes to the polls next month.

As parliamentary time runs out, what’s known as the “wash-up” process sees certain legislation fast-tracked. In this case, that means a shorter debate over amendments in the House of Lords.

The bill stems from a consultation from the Competition and Markets Authority in 2022 that suggested that Apple and Google “hold all the cards” in the mobile browser and cloud gaming markets. Without interventions, it said, both companies were likely to maintain, and even strengthen, their grip on the sector, further restricting competition and making life harder for innovators.

The bill, in its final form, is broadly similar to the EU’s Digital Markets Act. It applies to companies designated as having “Strategic Market Status” in relation to one or more digital activities, and gives the CMA the power to act if they’re deemed to be abusing their power. SMS will apply to companies with “substantial and entrenched market power” and “a position of strategic significance” – essentially the largest tech firms.

“The new UK regime marks a significant step change in the way these companies can operate in the UK, so that there will be much more engagement with, and reporting to, the competition regulator moving forward, and much more scope for the CMA to intervene in these businesses’ commercial decisions where it considers that those decisions could negatively impact competition in the UK,” says Elizabeth Coleman, partner at law firm Linklaters.

The CMA could, for example, prevent these companies from giving preference to their own products and services, or order them to provide competitors with greater access to data and functionality. It could require them to allow the products and services of other firms to work with their own, and force them to trade on fairer term, or increase transparency around aspects of their algorithms.

Penalties for non-compliance can reach up to 10% of global annual turnover.

Unlike the EU’s DMA, which has a fixed set of rules for firms deemed as “gatekeepers”, the DMCC bill allows for great flexibility. The CMA’s Digital Markets Unit has been given extremely broad discretion when deciding what obligations should be imposed on each firm.

The bill has been broadly welcomed across the political spectrum, with Labour peer Baroness Jones of Whitchurch calling it “a good bill”.

It’s also popular with campaigners and app developers who have argued for a more level playing field within app stores.

“We are thrilled to see the Digital Markets, Competition and Consumers Bill passed by the UK Parliament, which with strong enforcement will benefit businesses and consumers across the UK and beyond,” says Rick VanMeter, executive director of the Coalition for App Fairness.

“Once the bill receives Royal Assent, the Competition and Markets Authority will be empowered to rein in Apple’s and Google’s control over the UK’s mobile app ecosystem and open it up to fairness and choice for developers and consumers.”

He adds: “This is another major step in a growing, global movement for fair digital markets, in one of the world’s leading technology and consumer markets.”