House of Lords warns watering down Digital Markets, Competition and Consumers Bill would ‘create a power imbalance’

The House of Lords has warned Prime Minister Rishi Sunak not to water down the appeals system in the Digital Markets, Competition and Consumers Bill. 

In a letter to the prime minister, Baroness Stowell, chair of the House of Lords communications and digital committee, has said dropping the judicial review would undermine the purpose and value of the regulatory framework. 

The legislation, which is currently working its way through parliament, aims to regulate competition in digital markets with a focal point on protecting consumer rights. 

Last June, a cohort of big tech companies, including Meta and Apple, called for the House of Lords to reform the legislation to allow them to appeal decisions by the Digital Markets Unit in a “full merits” review - meaning they could appeal judgements from all angles rather than only on a legal basis. 

 She explained a change in the system would only result in “lengthy” litigation, “create a power imbalance” and add uncertainty around the framework. 

The letter said: “Introducing more avenues for legal challenge on the basis of proportionality tests would not in itself make the process fairer, but it would create a major power imbalance favouring those with the greatest resources. 

“Our evidence suggests that broadening the grounds for review or introducing a full merits process would incentivise adversarial tactics and preparations for lengthy legal disputes from the outset.” 

“The government should adopt regulations which are fair and provide a level playing field encouraging UK businesses to compete and grow. Changing the JR process would undermine this,” it added. 

However, she also argued against stricter measures being put in place, or it would risk the bill from becoming anti-big-tech. 

“It's important that the DMCC Bill is fair to all parties and does not become an anti-big tech Bill. 

“We recommend that you resist proposals to place disproportionate burdens on big tech firms. We have heard arguments that big tech firms should be subject to stricter measures under the countervailing benefits provisions, for example. We do not think this is necessary and consider that the current provisions remain adequate”, the letter said. 

Currently, the bill is going through its final report stage before moving to its third and final reading at the House of Commons.