The Digital Markets, Competition & Consumers Act gives the CMA more power and expands the UK’s merger control regime.

This landmark legislation provides expanded powers to the CMA in respect of merger control, digital markets, competition and consumer protection. This landmark legislation gives the CMA expanded powers in merger control, digital market, competition and consumers protection.

The DMCC introduces a new alternative threshold for merger control reviews. This will allow more transactions to be reviewed by the CMA. It aims to level the playing field within digital markets by, for example, imposing stringent new notification requirements on firms with ‘Strategic Market Status’, but also significantly bolsters the Competition and Markets Authority’s (CMA) enforcement powers more broadly.

Merger Control

The DMCC introduces new thresholds and procedures aimed at expanding the CMA’s ability to review M&A transactions, particularly those involving nascent competitors (often referred to as “killer acquisitions”).The new thresholds apply to transactions that have not closed, or for which the CMA has not opened an investigation by 31 December 2024.

New Filing Thresholds

: The DMCC expands the jurisdiction of the CMA by introducing a new, alternative threshold for merger review, which will give the CMA the ability to review M&A transactions with a UK nexus where:

one party has both (i) an existing 33% (or more) share of supply of goods or services in the UK or in a substantial part of the UK and (ii) UK turnover exceeding PS350 million; and

another party has a “UK nexus”, meaning it is registered in the UK, carries on activities in the UK, or supplies goods or services to UK customers.

• This new threshold removes the existing requirement that both the buyer and the target must have overlapping UK activities or that the target must have substantial UK operations. The DMCC expands the jurisdiction of the CMA by introducing a new, alternative threshold for merger review. This will give the CMA the ability to review M&A transactions with a UK This threshold will not require a filing, but it will allow the CMA to review the deal. This may lead to voluntary submissions, as buyers want to know if a deal will be reviewed by the CMA. A safe harbour exempts mergers involving small businesses where each party has an annual UK turnover of less than PS10 million from review. This fast track and extended reviews allows merging parties the option to request a reference to Phase 2 when it becomes clear that a thorough investigation or remedies are required. Additionally, the CMA and merging parties can agree to extend the Phase 2 review without limit, adding flexibility to the process.
• Increased Penalties
• : The DMCC significantly increases fines for failing to respond to information requests or providing misleading information. The maximum fine is now 1% of worldwide annual turnover with additional daily penalties up to 5%. The previous maximum was PS30,000.

• Digital Companies With Strategic Market StatusThe DMCC empowers CMA’s Digital Markets Unit to regulate major businesses operating The DMCC will impose specific obligations and requirements on companies that are designated as “Strategic Market Status”. The CMA has stated that it will initially focus its investigations on three or four companies. Sarah Cardell, the chief executive of the CMA, has emphasised that these investigations will be “evidence-based, targeted and proportionate”.
• The DMU will be able to designate firms as having SMS if they have “substantial and entrenched market power” and “a position of strategic significance” in relation to digital activities linked to the UK. The legal test may be broad, but in practice it is expected that the SMS regime will only apply to a few of the largest tech firms. The designation comes with a number of new responsibilities, including regulatory obligations. SMS firms are required to follow a set of tailored conduct requirements (CRs), which regulate their behaviour in relation to activities for the purposes for which they were designated. Due to the fact that CRs are tailored for each SMS firm, they will likely vary significantly – unlike more prescriptive “dos” and “don’ts” under the Digital Markets SMS firms will be expected to increase transparency in their dealings. This includes terms of service, changes to algorithms and policies that impact market access or consumer choices. The CMA may also be empowered to impose PCIs on SMS firms. These interventions may include mandating interoperability, or requiring changes to business practices which stifle the competition. If behavioral changes are not enough to restore competition, structural remedies such as divestitures may be considered. CMA has been given robust powers to enforce these provisions. This includes the ability for the CMA to impose significant penalties for non-compliance. The penalties can be as high as 10% of a company’s global turnover. This highlights the importance of SMS firms complying with these rules. In a big shift from the UK’s (technically) voluntary/non-suspensory merger control regime, SMS firms will be obliged to report M&A transactions prior to closing when (i) they acquire shares/voting rights exceeding thresholds of 15%, 25%, or 50% in a target with a UK nexus; and (ii) the deal value exceeds PS25m. This reporting obligation is potentially much broader than its DMA equivalent, since it relates to anymergers meeting the relevant thresholds, regardless of whether the target is active in digital services or the collection of data.
• Snapshot overview

CMA can review transactions when any of the following thresholds are met

• * Target has annual UK turnover of PS100 million (
• Increased from PS70 million
• )

* The parties, after the transaction, have a share of supply of goods or services of 25% in the UK, or a substantial part of the UK (

No change

The DMCC aligns the CMA’s consumer protection enforcement powers with its competition enforcement powers.

Direct Enforcement and Fines

: The CMA can now directly impose fines of up to 10% of global turnover for breaches of consumer protection laws, bypassing the need to initiate court proceedings. It can also provide compensation directly to consumers to remedy harm. These measures aim to ensure that consumer payments are fully protected and that consumers are not misled by deceptive business practices.

• All businesses that are consumer facing will need to consider the impact of the DMCC. The advent of direct enforcement and fining powers, coupled with the CMA’s focus on protecting consumers amid the cost of living crisis, means consumer protection compliance policies (relating to both existing and new rules) should be reviewed.
• Implications for BusinessBusinesses operating in the UK need to prepare for the new regulatory landscape introduced by the DMCC to adapt to the changes and mitigate potential risks.
• Review carefully call-in risk for transactions:

Assess whether the new expanded merger control thresholds will catch planned M&A transactions, in particular transactions with no horizontal overlap but which may raise antitrust innovation concerns.

Assess SMS Risk

: Companies likely to be designated with SMS should start preparing for compliance with the new conduct requirements and potential pro-competition interventions. Other firms may need to assess how the new rules governing major tech platforms may impact their sector and business activities.

• Update Compliance Programs: Companies should update their compliance protocols to align with the new conduct requirements, consumer protection laws, and the increased penalties for non-compliance. Special attention should be paid to document retention and responsiveness to CMA information requests.
• Monitor CMA Guidance: It is crucial to stay informed about forthcoming CMA guidance on the new regime to ensure timely compliance and avoid potential penalties.

*Shruthi Madhusudan (White & Case, Trainee, London) contributed to the development of this publication.

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