Back in August we wrote about the fact that Digital Markets, Competition and Consumers Act 2024 requires the Competition and Markets Authority (CMA), the courts and other enforcers to estimate or calculate a business's turnover. This is to assess if a business should be designated as having 'strategic market status' (SMS), or to decide the statutory maximum for penalties that organisations or individuals may have to pay if they do not comply with the Act.

The introduction of turnover based penalties aims to allow penalties proportionate to the size of the business involved, with the aim of providing a more effective deterrent for businesses not complying with investigative measures or breaching the remedies, conduct requirements or other measures imposed by regulators.

Consequently, the Department for Business and Trade consulted on the content of draft regulations setting out:

• how turnover should be estimated or calculated; and 
• the circumstances in which a person is considered to have control over an enterprise.

It has now published the government's response to the consultation about three regulations, which have now been finalised and laid before parliament. The regulations set out how turnover should be estimated or calculated and the circumstances in which a person is considered to have control over an enterprise. They are:

• The Competition Act 1998 (Determination of Turnover for Penalties) Regulations 2024.
• The Enterprise Act 2002 (Mergers and Market Investigations) (Determination of Control and Turnover for Penalties) Regulations 2024.
• The Digital Markets, Competition and Consumers Act 2024 and Consumer Rights Act 2015 (Turnover and Control) Regulations 2024

The regulations reflect comments from the consultation but the government has not made any changes to the underlying policy.  

From a consumer law perspective, the government has separated the provisions about the concept of control and the calculation of turnover for consumer penalties into two sections for the DMCC Act and for the Consumer Rights Act 2015.

The regulations enter into force on 1 January 2025, when the digital markets and competition provisions of the DMCC Act also come into force.