The UK’s Digital Markets, Competition and Consumers Bill
Growing UK Businesses & Benefiting UK Consumers
Bill Overview
The United Kingdom has the opportunity to cement its place as a world-leading tech superpower but is struggling to establish a home-grown digital giant. The UK has nearly all the conditions for tech businesses to flourish – but established digital giants are leveraging their position to hold back competition.
The Government introduced the Digital Markets, Competition and Consumers (DMCC) Bill to address the market conditions that are holding back businesses and entrepreneurs throughout the UK. The Bill will drive growth, innovation, and benefit UK consumers.
The Bill will empower the Digital Markets Unit (DMU) within the Competition and Markets Authority (CMA) to sanction businesses acting in an anticompetitive manner to the detriment of consumers. As it stands, a lack of a proper competition in the mobile application economy is contributing to several issues including:
- Artificially raising prices and limiting choice for consumers.
- Stifling UK start-ups’ ability to scale and innovate by taxing 30% of most app purchases and in-app purchases.
- Restricting competition and freedoms through self-preferencing.
Fully empowering the DMU is necessary to ensure the mobile app economy in the UK is competitive
Position: We support the current draft of the DMCC Bill
As an independent nonprofit organisation, we represent over 70 companies including startups, small developers, indie studios and popular apps, many of which are based and operate in the UK. All our members are unanimous in our support for the DMCC Bill.
There is an urgent need for the DMCC Bill to pass. The chokehold two companies have over app stores is stifling the UK economy, businesses, and the ability to innovate and is leaving consumers with less choice and higher costs.
App stores are a critical gateway to consumers of digital products and services. While they can be beneficial when operated fairly, they can also be used by platform owners to hurt developers and consumers. Now, app store owners dictate the terms of use which can be arbitrary and self-preference the product of the app store owner over others.
The Coalition for App Fairness believes that the Digital Markets, Competition and Consumers Bill provisions on Digital Markets are well designed and must not be watered down. The Bill will give the DMU the ability to act quickly and effectively to limit harm caused by companies acting anticompetitively.
CAF firmly supports the JR appeals standard. We do not advocate for the introduction of anything novel like JR+ or any untested additions into the JR appeals standard. This is a backdoor way of watering down the DMU’s ability to do its job.
Digital markets operate the same way other markets do. Testing an entirely new process is likely to result in confusion and unintended consequences. The CMA is globally renowned for its due diligence. For this regime to work well, the DMU must be empowered as an expert arm to deal with digital monopolies while allowing them to use the tried and tested systems of the CMA.
In line with its aims, we want the Bill to focus on companies with a significant negative impact on the market. By narrowing the definition of what qualifies a firm as having ‘Strategic Market Status’ to include more qualitative measures, such as where there is vertical integration and a firm has the potential to exploit their position to the detriment of others, the Digital Markets Unit (DMU) will be empowered to rigorously focus on the few firms causing the most problems. While we whole-heartly support the Bill as written, we believe that by making the text even more precise this will give businesses and the wider digital market the confidence over the intended aims of the Bill, signalling even more strongly that the UK is the place for tech business and innovation.
Consultation rights should be equal. In the current drafting of the Bill, those companies designated with ‘Strategic Market Status’ (SMS) by the DMU are given more consultation and transparency rights than challenger companies. Non-SMS companies that are the most directly affected should have equal consultation rights to the SMS firms.
We want every app developer to have an equal opportunity to innovate and engage with their customers, free from arbitrary policies, unfair transaction fees, or monopolistic control by app store owners. The behaviour of Apple and Google not only restrict competition and freedoms but also have forced some developers out of business when they do not play by the gatekeepers’ rigid rules.
There is an urgent need to ensure this Bill is passed swiftly and is protected from undue influence from Apple, Google, and their allies.
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Case Studies
New and innovative applications are under constant threat from the monopolistic practices of Google and Apple.
Future growth and success of the business is at risk, owing to Apple’s aggressive stronghold on the app marketplace.
For some time, there was robust competition in the digital sector. However, after years of consolidation and abuse of market power, two app stores now dominate the marketplace.
While the current status quo perpetuated by Apple is clearly harmful to many individual businesses, it can also have a significant impact on whole industries.
Proton is making privacy universally accessible with over 100 million sign ups, including journalists, some of the world’s largest public and private organizations, and people around the world. However, this vital support for customers is under threat by the unfair practices perpetuated by Apple and Google.
The CEO of the Online Dating Association, Dr Hannah Shimko, says the tech giants are stifling innovation, scaring competition away through retaliation and self-preferencing, crippling revenue through extortionate taxes, and putting user safety at risk.
As a company on the forefront of the global AI and crypto revolution, it is surely vital for a company like Blockchain.com to be unrestricted by petty and arbitrary restrictions from Apple and Google, yet they are faced with a wall of issues.
Due to the oppressive monopoly Apple and Google hold, GlobalCharge has lost the chance to provide app developers with their payment solution.
Coming to a trusted third party is vital for many businesses. Paddle does this in a way that is economically viable for these businesses—yet it is something that is restricted, thanks to the current monopolistic system of Apple and Google.
Despite the size and global stature of Spotify, Apple and Google’s monopolistic practices are harming both this business and its consumers.
Kelli Fairbrother, Co-CEO and Co-Founder argues the control Apple and Google have over the App Stores is stifling investment opportunities and is preventing global growth.
Further Reading
You can read the Coalition for App Fairness’ full position on the Digital Markets, Competition and Consumers Bill or follow the government’s passage of the bill using the links below.