New Linklaters paper on appeals of UK’s Digital Markets Unit decisions: will judicial review actually be faster and more effective?

The Digital Markets, Competition and Consumers Bill (DMCC Bill) hands the UK’s CMA’s Digital Markets Unit unprecedented discretion in how it administers the forthcoming Strategic Market Status (SMS) regime – the UK’s long awaited answer to the EU’s DMA, which will regulate the largest tech platforms (see our previous posts on the DMCC).

The DMCC Bill provides that decisions of the DMU can be appealed to the UK’s Competition Appeal Tribunal (CAT), but on judicial review (JR) grounds only. This means the CAT can only overrule the DMU on grounds such as procedural fairness, error of law, and irrationality – not simply if it considers a DMU decision is “wrong”. 

Additionally, where the CAT does overrule the DMU, regardless of how easily the CAT might be able to correct the law it cannot substitute own decision for that of the DMU – it can only send the decision back to be made again. This will make DMU decisions subject to a lower standard of judicial scrutiny than decisions taken by the CMA with its competition enforcement powers, which are subject to “merits review”.

We have previously explained why there is a strong case for decisions taken by the DMU to be subject to a higher level of judicial scrutiny than traditional JR. The correct standard of review has been the subject of significant debate in the Parliamentary process so far and advocates of the JR standard have argued that a higher (e.g. merits) standard would unnecessarily slow down and ultimately stifle the effectiveness of the SMS regime.

In a new Linklaters paper published today  we have examined timing in relevant historical appeals of the CMA (and its predecessor authorities') decisions and found that the assertion JR is faster is not correct. While it is true that appeals on JR standard are determined faster than appeals on merits basis, where a decision is overturned, the remittal process means it takes longer to reach a final resolution than in merits appeals.

Our paper also argues that – given an appeal does not suspend the application of a DMU direction or order – there is no sound basis for the assertion that a higher standard of review would stifle the efficacy of the SMS regime. 

In fact, while in a scenario where the DMU decision is upheld by the CAT the standard of review makes no difference (because the conduct requirements apply while the appeal is pending, and continue to apply when the appeal is determined), in scenarios where the CAT finds the DMU got it wrong (even on a purely procedural basis), the need for a remittal means the impugned decision will not apply during the remittal.

For our full analysis, read the paper here.