UK bill could protect consumers from ‘subscription scams’ and fake reviews
The UK’s Competition and Markets Authority (CMA) has introduced a new bill that would give it the power to punish the biggest tech companies with billions in fines if they fail to comply with its rules. It’s a multifaceted bill that aims to protect consumers and encourage competition, and will allow the CMA to directly enforce the law instead of having to go through the courts.
If the bill passes, the agency’s Digital Markets Unit (DMU) will be able to enforce a set of rules for how companies it sees as having “strategic market status” in key digital services must operate. The CMA did not name any specific companies in its announcement, but the DMU most likely identifies Google, Apple and Amazon as organizations with strategic market status.
The DMU could require them to be more transparent about how their app store review systems work or to open up their data to rivals; in the case of Google, it could be a rival search engine. If these companies do not comply with the new rules, the DMU could fine them up to 10 percent of their global turnover. Apple, for example, made about $283 billion in revenue by 2022, so that could translate to a massive $28.3 billion worth of fine.
As well as giving the CMA the power to set rules for tech giants, the new bill will also tackle the problem of “subscription cheating”, which costs UK consumers £1.6bn ($2bn). Americans) per year. Its new rules will require companies, not just the biggest tech companies, to give customers clearer information before starting a subscription. Businesses will also need to send customers notifications if their free or low-cost trial is coming to an end and before their subscription automatically renews. In addition, companies will need to provide customers with an easy way to opt out. In the US, the Federal Trade Commission proposed a similar rule in March that would make unsubscribing as easy as signing up. The proposal is also awaiting approval before it can be implemented.
Another concern the bill will address is false reviews. The new rules are expected to prohibit companies from commissioning and submitting fake reviews and posting reviews without taking steps to ensure they are genuine. Additionally, the rules would make it illegal to offer or advertise the submission, commissioning, and facilitation of fake reviews.
Sarah Cardell, executive director of the CMA, said in a statement:
“The new powers in this bill help the CMA take swift and decisive action to tackle scams, protecting consumers whether they shop online or on the high street. The new fines powers will provide significant deterrent to companies looking to take advantage of people, while ensuring that fair dealing businesses can thrive.
The bill will also strengthen the Digital Markets Unit, helping to ensure that digital markets remain competitive and continue to benefit people, businesses and the UK economy. We welcome your submission to parliament and look forward to seeing it progress.”