Rishi Sunak performs delicate balancing act in Big Tech lobbying battle

LONDON — After months of lobbying, Big Tech companies have won some concessions from the U.K. government on its new competition bill — but not everything has gone their way.

On Wednesday morning the government laid almost 200 amendments to its landmark Digital Markets, Competition and Consumers Bill (DMCC), which gives the Competition and Markets Authority (CMA) sweeping new powers to rein in a small number of Big Tech companies. It also introduces heavy fines for firms that fail to comply with new rules.

The changes include partially rewriting an aspect of the legislation which Big Tech companies and their challengers had fought the hardest over — the mechanism for appealing the competition regulator’s decisions.

The amendments come after the technology Michelle Donelan secretary told POLITICO this week that the government had been listening to “all sides of the debate” over the bill, saying it would “evolve” when it returned to parliament.

Since the bill was first published in April, Big Tech firms have been lobbying ministers to change the appeal mechanism.

Together with a legion of free marketeers, they have argued that the bill’s original provisions only allowing decisions to be challenged on procedural grounds, known as judicial review, failed to provide adequate scrutiny of the regulator, and would make the U.K.’s competition regime an international outlier.

Instead, they argued that firms should have the ability to challenge CMA decisions on the “merits” of the case, which would mean a court looking at the substance of the CMA’s conclusions.

In contrast, the CMA had warned that changing the appeal mechanism could lead to protracted legal battles and an adversarial relationship with the firms it is seeking to regulate. A Lords committee last month urged the government to hold firm on the judicial review standard.

The changes published by the government on Wednesday mean tech firms will be able to appeal fines levied by the regulator “on their merits.”

However, other decisions made by the CMA under the bill, such as the imposition of certain constraints on firms’ conduct, can still only be appealed through judicial review.

The Coalition for App Fairness, which represents app developers including Spotify and Epic Games, said it was “sceptical of any proposed changes” to the appeals mechanism.

A former CMA official told POLITICO that the regulator would be “pleased” that judicial review would stay in place for the the vast majority of decisions. “The recent public advocacy by supporters of stronger digital regulation has been a very effective rear-guard action,” the person said.

April Boyd, head of public policy at Spotify, said it was “extremely important” that the judicial review standard remained in place. News Media Association chief executive Owen Meredith said it would “ensure the CMA has the tools to act and is not bogged down in complex, lengthy, and costly legal wrangling.”

Under the amendments, the CMA has to consider harm to consumers and proportionality before it imposes new rules on firms.

Neil Ross, associate director for policy at industry group TechUK, said the changes showed the government had recognized some of its concerns about the CMA having too much power.

The government said its changes would ensure the CMA acted proportionally and faced “rigorous checks and balances” before imposing heavy fines. New minister at the Department for Science, Innovation and Technology, Saqib Bhatti, described the amendments as avoiding “undue regulatory burdens.”

Shadow digital minister Alex Davies-Jones said: “Measures to protect consumers, enhance innovation and promote competition is long overdue but Tory infighting and the Prime Minister, distracted from the serious issues at hand, has led to significant delay.”

“The government’s amendments will see measures around the appeals process weakened and in some cases Big Tech will still be able to maintain anti-competitive practices.”

Matthew Lesh, from free-market think tank the IEA, which published a report in September attacking the bill, said he welcomed the amendments, but wanted them to go further.

Former Justice Secretary Robert Buckland, who wrote the foreword to that report, has separately laid amendments which will be debated in the Commons on Monday, alongside the government changes.

Vincent Manancourt contributed reporting.