Bill to crack down on big tech, fake reviews and subscription traps

A regulator must police the ‘excessive dominance’ of big tech platforms with the power to fine them up to 10% of their global revenue under the new legislation.

The Digital Markets Unit (DMU), which was launched two years ago within the Competition and Markets Authority (CMA), will have new powers to ensure that consumers and businesses are not unfairly disadvantaged by the biggest actors.

Companies deemed to have ‘strategic market status’ in key digital services could be forced to comply with tailored rules on how they operate or face hefty fines under the draft Digital Markets, Competition and Consumers Act.

The DMU will be able to carry out targeted interventions to allow start-ups or small businesses to compete.

The bill will end a period of limbo for the DMU, ​​which was set up with no power beyond the CMA’s current arsenal.

The bill also allows the government to ban sites from facilitating fake reviews or advertising consumer reviews without taking reasonable steps to verify that they are genuine.

New rules will ensure consumers can terminate subscriptions easily, cheaply and in a timely manner and will require businesses to send a reminder when a free trial or introductory offer is about to expire.

Business and Trade Minister Kevin Hollinrake said: “Smartphones and online shopping have profoundly changed the landscape for businesses, consumers and the foundations of a thriving modern economy, which now reside in strong choice, trust and consumer competition.

“From the abuse of power by tech giants, to fake reviews, scams and rip-offs like getting caught in a subscription trap – consumers deserve better.

“The new laws we’re delivering today will enable the CMA to directly enforce consumer law, strengthen competition in digital marketplaces, and ensure that people across the country keep their hard-earned money.”

CMA Chief Executive Officer Sarah Cardell said, “The new powers in this bill help the CMA take swift and decisive action to address rip-offs, while protecting consumers whether they’re shopping online or on the street.

“The new sanctioning powers will provide a major deterrent to businesses seeking to take advantage of the people, while ensuring that businesses that operate fairly can thrive.

“The bill will also strengthen the Digital Markets Unit, helping to ensure that digital markets remain competitive and continue to benefit the UK’s people, businesses and economy. We welcome its introduction in parliament and look forward to it.”

Which? Policy and Defense Director Rocio Concha said: “This bill is a vital step to make markets work better in the UK for consumers, businesses and support economic growth.

“Whether it’s fake reviews from dishonest companies or people getting trapped into unwanted and expensive subscriptions, our consumer protections deserve an update.

“Which one? He has long been fighting for stronger powers for the Competition and Markets Authority, including strict enforcement and the ability to directly fine companies that violate the law.

“The expansion of the CMA’s Digital Markets Unit will also be an important step forward. It needs the right powers to loosen the grip-like grip of a handful of tech giants that will foster innovation and give consumers more choice and lower prices.”

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