The Digital Markets, Competition and Consumers Bill: a (so far) failed attempt to open the door for collective consumer law actions

A recent proposed amendment to the Digital Markets, Competition and Consumers Bill (the “DMCC Bill”) attempted to introduce a significant change to the class action landscape in the UK by allowing collective claims based on consumer law to be brought before the Competition Appeal Tribunal (the “CAT”). However, following the rejection of the proposed amendment in the House of Commons, it seems the DMCC Bill is likely to maintain the status quo for the collective action regime before the CAT. The current version of the DMCC Bill can be found here.

A bid to expand the collective action regime to consumer law

The DMCC Bill is intended to protect consumers by strengthening the enforcement of consumer protection, most notably in digital markets. It was first put before Parliament in April 2023, and is currently entering the House of Lords following consideration by the House of Commons. Since its inception, it has been designed to give the UK’s consumer protection regime more teeth by increasing not only the rights afforded to consumers, but also the enforcement powers of the Competition and Markets Authority (the “CMA”), which has previously tended to focus on the enforcement of competition law where it had greater powers to enforce. To that end, the DMCC Bill drastically increases the risk of being found in breach of consumer law and introduces hefty penalties for doing so (companies could face court or administrative processes and fines of up to 10% of global turnover). Existing compliance regimes may well be underweight compared to the new risk of public enforcement (see our previous insight on this here).

Until recently, however, the discussion of the DMCC Bill had been largely silent on private enforcement of consumer law, which to date has largely taken place on an individual basis before the small claims courts or through settlements with the CMA. However, on 15 November 2023, and with no fanfare or forewarning, an amendment was tabled by former Lord Chancellor the Rt Hon Sir Robert Buckland MP (with the support of a number of other Conservative MPs) proposing to expand the scope of collective actions before the CAT to include actions based on consumer protection law (the “Proposed Amendment”). The Proposed Amendment did not have official government backing and did not pass in the House of Commons, but could be re-introduced if a member of the House of Lords wants to push the same agenda. The text of the Proposed Amendment is at NC26 of the Amendment Paper dated 15 November 2023.

If enacted, the Proposed Amendment would significantly widen the remit of the CAT’s collective actions regime and turn the UK into a true class action jurisdiction. This would put any business-to-consumer companies at risk of large-scale collective actions regardless of their market size (unlike the recent flood of collective competition law actions brought on the basis of companies allegedly abusing a dominant position). 

Status quo: Attempts to bring non-competition consumer claims under the existing regime likely to continue

Unless the Proposed Amendment makes its way into the DMCC Bill, consumer law-based claims are unlikely to succeed as collective actions unless they can be shoehorned into the existing competition regime – a trend which we have seen in a number of recent collective actions before the CAT (see our previous thoughts on this here). 

Nonetheless, the CAT’s willingness to certify collective actions that are seemingly pushing the boundaries of competition law, along with the inclination shown by both the CAT (in its recent decision in the PlayStation collective action) and Parliament (through other amendments already approved to the DMCC Bill) to soften the impact of the Supreme Court’s recent decision on funding of collective actions (see our previous blog post on this here), make it clear that there is appetite to continue to fuel the growth of collective actions in the UK within the existing regime. 

In the absence of explicit legislation permitting consumer-law based class actions, we expect claimant law firms and their funders to continue seeking opportunities to bring novel and wide-reaching claims under the existing competition framework. Businesses with sizeable market shares and consumer-facing operations should therefore continue to keep their eyes open to litigation risk as the regime continues to evolve.