The competition watchdog has been granted greater authority, potentially leading to global corporations such as Google, Apple, and Amazon facing penalties of up to 10% of their overall revenue
Under the newly proposed legislation called the Digital Markets, Competition and Consumers Bill, major technology companies are at risk of receiving multibillion-pound fines for violating consumer protection regulations, such as offering fake online reviews and challenging subscription cancellations. The UK’s competition watchdog will have greater authority to address the “excessive dominance” exerted by a small group of tech companies over consumers and businesses.
Companies like Google, Apple, and Amazon, which are recognized as having “strategic market status,” will be subject to stringent regulations under the proposed bill. If they violate the new system, they may face a penalty of up to 10% of their worldwide revenue.
The government has announced that companies may need to share their data with competing search engines or improve the visibility of their app stores and review processes, but did not disclose the specific firms. The Digital Markets Unit, a branch of the Competition and Markets Authority, will monitor major tech companies and determine which ones qualify for strategic market status. This legislation is anticipated to be presented to parliament on Tuesday and is predicted to be enacted into law in the coming year.
The upcoming law will address “subscription traps,” where businesses employ tactics to prevent customers from cancelling their contract. This regulation will apply to all companies, not just those with strategic market status. The new rules will require businesses to notify consumers when a complimentary trial or discounted introductory offer is nearing completion and guarantee a simple, affordable, and prompt process for ending the contract.
The proposed legislation will also address fraudulent reviews, although the specific requirements will undergo a consultation procedure before being finalized. The current preliminary provisions suggest that it will be unlawful to post inauthentic reviews without verifying their authenticity, pay someone to create a bogus review, or offer to submit one. Recently, the consumer advocacy organization, Which?, cautioned that Facebook groups that incentivize fake reviews with complimentary products or compensation still exist on various platforms, including Amazon, Google, and Trustpilot.
The Minister of Business and Trade, Kevin Hollinrake, remarked, “Consumers should not have to endure the exploitation of tech giants, fraudulent reviews, or deceptive schemes like subscription traps. Our forthcoming legislation will enable the Competition and Markets Authority to enforce consumer laws, bolster competition in digital markets, and safeguard people’s hard-earned money throughout the nation.”
