UK regulator receives more powers to rein in Big Tech
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Google, Apple, Amazon and other tech giants could face fines of up to 10 per cent of their global turnover under a new digital consumer bill.
The UK's Competition and Markets Authority (CMA) will be granted more powers to regulate the "excessive dominance" of large technology platforms and further protect customers, the government has said.
The changes will be made under the new Digital Markets, Competition and Consumers (DMCC) Bill, which will target firms deemed to hold “strategic market status” - defined as those with a global turnover of over £25bn - and work to prevent unfair business practices, including fake online reviews and difficult-to-cancel subscriptions.
Under the draft law, major tech firms will receive strict customer protection rules and could face the threat of multibillion-pound fines should they breach them.
The legislation will aim to strengthen the Digital Markets Unit (DMU), a section of the CMA launched in 2020. The DMU was originally expected to be given powers to devise codes of conduct for tech companies and impose fines of up to 10 per cent of annual turnover. However, it currently has no powers beyond the CMA’s existing capabilities.
The new draft law would bring back the DMU to the forefront of the government's tech policy and is expected to allow the watchdog to carry out targeted interventions to allow start-ups or smaller firms to compete.
“From abuse of power by tech giants, to fake reviews, scams and rip-offs like being caught in a subscription trap, consumers deserve better," said Kevin Hollinrake, the business and trade minister. “The new laws we’re delivering will empower the CMA to directly enforce consumer law, strengthen competition in digital markets and ensure that people across the country keep hold of their hard-earned cash.”
The DMCC bill would also ban companies from posting fake reviews without checking that they are genuine, commission someone to write a fake review or offer to submit one.
The draft law will also establish rules to ensure consumers can end subscriptions in a "straightforward, cost-effective and timely way" and require businesses to send a reminder when a free trial or introductory offer is coming to an end.
Moreover, the government said firms could be required to open up their data to rival search engines or increase the transparency of how their app stores and review systems work.
"Digital markets offer huge benefits, but only if competition enables businesses of all shapes and sizes the opportunity to succeed," said Sarah Cardell, chief executive of the CMA. "This bill is a legal framework fit for the digital age. It will establish a tailored, evidenced-based and proportionate approach to regulating the largest and most powerful digital firms to ensure effective competition that benefits everyone."
Which? director of policy and advocacy Rocio Concha added: “This bill is a pivotal step to make markets in the UK work better for consumers, businesses and support economic growth. Whether it’s fake reviews by dishonest businesses or people getting trapped in unwanted and costly subscriptions, our consumer protections are overdue an upgrade."
As part of his Autumn Statement, UK Chancellor Jeremy Hunt announced that the government would present a draft of the Digital Markets Competition & Consumers Bill before May 2023.
In November, the CMA launched a full investigation into Google and Apple’s dominance of mobile web browsers after a consultation found that the two companies exercised "a stranglehold over operating systems, app stores and web browsers on mobile devices”.
The DMCC will be tabled in parliament on Tuesday and is expected to become law in 2024.
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