DMCC Act: How New Digital‑Markets Rules Affect Your Business

It’s no secret that digital businesses are booming, and the government has finally responded with some of the strongest reforms we’ve seen in years. With the new Digital Markets, Competition and Consumers Act (DMCC Act), the rules have seriously changed for everyone operating in the UK’s digital economy-whether you’re a tech giant or a growing online retailer.

These changes come with tougher regulations, higher penalties, and a lot more scrutiny over how you deal with both consumers and competitors online. Sound a bit overwhelming? Don’t stress-we’ll break it all down in plain English, so you know exactly how the DMCC Act could impact your business and what practical steps you should take next.

Ready to make sure you’re protected from day one? Keep reading-this guide covers what’s changed, who’s affected, and how to stay compliant.

What Is The DMCC Act?

The Digital Markets, Competition and Consumers Act 2024-aka the DMCC Act-is a brand new legal framework designed to:

• Rein in the power of major tech companies known as “digital gatekeepers”
• Protect consumers from unfair, misleading, or aggressive business practices
• Empower the Competition and Markets Authority (CMA) to directly enforce rules, investigate non-compliance, and issue hefty fines

While the Act is targeted at the world’s largest digital platforms (think search engines, social networks, app stores), its expanded rules and penalties apply to all businesses trading in digital markets or dealing with UK consumers. That means everyone-from startups to established e-commerce retailers-needs to pay attention.

What Is Strategic Market Status (SMS) And Who Will Be Affected?

The centrepiece of the DMCC Act is the new power to designate certain digital companies as having Strategic Market Status (SMS). If the CMA finds that a business holds “substantial and entrenched market power” in a digital activity with “strategic significance”-like operating a major search engine or app store-it can officially designate that company as having SMS.

What does this mean in practice?

• SMS companies face special codes of conduct-including stricter obligations around fair treatment of users, transparency, and preventing self-preferencing.
• The CMA can impose tailored remedies to address market abuses or force structural changes (for example, restricting certain acquisitions).
• Individual SMS firms may be subject to heightened reports and compliance checks.

At the moment, SMS is intended for the biggest global tech platforms (those with turnover above £25 billion worldwide or £1 billion in the UK). However, the ripple effects are much wider. If you provide services to or through these platforms-or compete in related markets-you could see contracts, processes, and standards change quickly.

For example, online marketplaces, SaaS companies, and fast-growth startups often build on top of “gatekeeper” platforms. If those platforms must treat business users more fairly under the DMCC Act, it may open up new opportunities-but also new compliance challenges.

For a deeper dive into the various ways you can set up, grow, or adapt your digital business under these new rules, check our guide to building an online marketplace or our article on turning your hobby into a business.

What New Powers Does The CMA Have Under The DMCC Act?

Previously, UK consumer protection could be patchy-regulators needed to go through lengthy court proceedings before launching enforcement action against businesses, often resulting in little practical deterrent for wrongful conduct.

The DMCC Act cuts out the middleman and grants the CMA and other regulators powerful new enforcement tools:

• Direct Fining Powers: The CMA can now impose fines directly on businesses that breach consumer law, unfair trading, or fail to comply with directions-no need for a court order first.
• Wider Range of Offences: The Act criminalises more forms of unfair commercial practice, targeting everything from misleading marketing to aggressive sales tactics.
• Stronger Evidence Powers: The CMA and associated authorities can request information, perform investigations, and require businesses to take (or stop) certain actions for consumer protection.
• Faster Redress for Consumers: Consumers who suffer loss as a result of breaches can now benefit more swiftly from regulatory interventions and remedies.

Need help navigating these regulatory changes? Head to our Legal Documents For Business resource to review your compliance across the board.

What Business Practices Does The DMCC Act Target?

Put simply, the new Act is designed to stamp out “unfair commercial practices” in their various forms. But what exactly does this mean? Here are the major categories targeted by the law:

• Misleading Actions or Omissions: Providing false or deceptive information (such as about pricing, product features, or company credentials), or failing to disclose important details.
• Aggressive Sales Tactics: Using harassment, coercion, or undue pressure to get a consumer to part with their money or personal information.
• Failure of Professional Diligence: Not meeting the standard of care and skill expected in your industry (for example, neglecting health and safety guidance or ignoring key consumer protection regulations).
• Unfair Contract Terms: Including hidden, one-sided, or “gotcha” clauses that create a significant imbalance between a business and its customer (such as hefty cancellation fees or restricting consumer rights).

The DMCC Act specifically targets online retailers, subscription businesses, app providers, and all digital service companies-sectors where these practices can quickly arise.

Uncertain if your contracts or sales approaches are compliant? Use our Consumer Protection Laws UK guide and small business cancellation policy advice as a starting point.

How Much Could You Be Fined Under The DMCC Act?

The DMCC Act takes enforcement to a completely new level, with sharp financial penalties for breaching its rules-including offences that previously carried nothing more than a slap on the wrist.

Here’s what’s at stake if your business is found in breach:

• For Consumer Protection Infringements: The greater of 10% of your global annual turnover or £300,000.
• For Failing to Comply with CMA Directions: The greater of 5% of turnover or £150,000 (plus daily rates for ongoing breaches).
• For Providing False or Misleading Information (Investigatory Breaches): The greater of 1% of turnover or £30,000.

These penalties apply not just to SMS firms, but also to any business trading in the UK that breaks the rules-especially if you’re found misleading or exploiting customers.

To put these numbers in perspective: For a fast-growing SME turning over £1 million a year, a single major breach could cost over £100,000-enough to seriously impact cash flow, reinvestment, and even the future of the business.

The message is clear: getting your business terms and contracts right is more important than ever.

What Practical Steps Can Your Business Take To Stay Compliant?

The legal landscape is moving fast, but there are clear, actionable steps every business should follow to stay on the right side of the DMCC Act:

• Audit Your Contracts: Review your customer T&Cs, supplier contracts, and partner agreements to ensure they’re clear, transparent, and don’t contain hidden traps or unfair terms. Need a hand? Setting Out Good Business T&Cs offers a useful checklist.
• Update Your Compliance Policies: Make sure your Privacy Policy, refund policy, and complaints procedure are up to date with the latest consumer protections and GDPR requirements. If you’re not sure where to start, check out our guide to Privacy Policies and our Data Breach Response Plan template.
• Train Your Team: Staff should understand what counts as misleading advertising or aggressive selling, and know how to handle consumer queries or disputes the right way.
• Stay Transparent: Whether it’s pricing, automatic renewals, delivery timelines, or data use, make sure you’re telling the full story up front. Surprises and “dark patterns” are exactly what this law is out to eliminate.
• Seek Tailored Legal Advice: Not every business faces the same risks under the DMCC Act. If you’re unsure about your exposure, get professional guidance-addressing legal requirements upfront is more cost-efficient than fighting issues down the track.

Trying to make sense of which contracts matter most? Download our free Supplier Contracts Checklist as a practical resource to get started.

How Does The DMCC Act Fit With Other UK Business Laws?

The DMCC Act doesn’t exist in a vacuum-it’s the latest addition to a fairly robust body of business and consumer protections in UK law, including:

• Consumer Rights Act 2015: Sets out basic rights around refunds, product quality, and fair terms.
• GDPR and Data Protection Act 2018: Governs how you collect, store, and use personal data.
• Competition Act 1998: Lays out do’s and don’ts for anti-competitive behaviour, cartels, and abuse of market position.

The DMCC Act beefs up these protections, especially on the digital and enforcement fronts. For a full review of UK business compliance, our guide to laws UK businesses must follow walks through the essentials.

What Happens If You Don’t Comply?

Unfortunately, “I didn’t know” isn’t a defence. Under the new Act, the consequences of non-compliance are tougher than ever:

• Hefty financial penalties-potentially up to 10% of your entire turnover for each proven breach
• Enforceable undertakings-the CMA can require you to change business practices, rewrite contracts, or compensate customers
• Reputational harm-enforcement actions and public naming by regulators can quickly reduce customer trust

As always, prevention is the best cure. Setting up proper legal foundations now will save you stress, cost, and disruption down the line-especially as customer awareness grows and enforcement ramps up.

Key Takeaways

• The DMCC Act introduces some of the toughest rules and penalties for digital businesses ever seen in the UK.
• Major tech firms may be subject to new Strategic Market Status regimes, but all businesses must comply with heightened consumer protection standards.
• The Competition and Markets Authority now has swift, direct powers to investigate breaches, enforce remedies, and issue large fines.
• “Unfair commercial practices” like misleading actions, aggressive sales, and unfair contract terms are targeted directly-review your T&Cs, marketing, and sales tactics.
• Ignorance is no defence-practical legal compliance (including updating contracts and transparency) is critical under these new rules.
• Early legal advice helps prevent problems-get your legal documents tailored and your compliance house in order, right from the start.

If you’d like detailed help preparing your legal documents or advice on how the DMCC Act affects your business, reach out to Sprintlaw’s team at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat. We’re here to help you cut through the complexity and make sure your business is protected from day one.