A new piece of legislation will be introduced in Britain’s House of Commons on Tuesday. It will seek to promote digital competition, curb subscription traps, and fight fake reviews. The legislation promises to bring benefits to both businesses and consumers and boost the credibility of the digital economy.
Under the new rules, the Competition and Markets Authority (CMA) will be the body that will enforce sanctions against violators. The moves are expected to save consumers a whopping £1.6 billion a year and get them out of subscriptions they never wanted before.
Penalties for violating the rules are as follows:
- Breach of consumer protection laws, up to 10% of global annual turnover for a business or up to £300,000 in the case of an individual;
- Breach of commitments to the CMA, with fines of up to 5% of the business’s annual global turnover or £150,000 for the individual, and additional daily fines for continued non-compliance; And
- Non-compliance with information notices, concealment of evidence or providing false information, fines of up to 1% of the annual global turnover of the business or up to £30,000 for the individual and additional daily fines for continued non-compliance.
“This Bill is an important step in making markets in the UK work better for consumers, businesses and supporting economic growth,” said Rocio Concha from consumer group Which? “Whether it’s fake reviews from unscrupulous businesses or people being trapped into unwanted and expensive subscriptions, our consumer protections are overdue. Which? We’ve long campaigned for stronger powers for competition and the Markets Authority. has been implemented, including stricter enforcement and the ability to directly penalize firms that break the law.
One of the problems with legislative approaches is that the language can be a bit wishy-washy. What exactly is a “subscription trap”? According to OK AnnouncementThese are subscriptions that have been intentionally made difficult to cancel. Under the new rules, businesses will be required to provide clear information about subscription contracts. Potentially, consumers who experience bad practices can complain to the CMA who will go after the business.
The new bill also targets fake reviews. It would be illegal to commission someone to write or submit a fake review. It would also be illegal to offer or advertise fake review services. Businesses that host reviews on their website must take reasonable steps to ensure that the reviews are legitimate.
Finally, the bill highlights the excessive dominance of a small number of tech firms over consumers and businesses in the UK. The new bill would allow for targeted interventions. This will open new avenues for startups and small businesses to offer their services so that they are not left out by the big tech companies.
If this bill becomes law, it will be interesting to see how far it is implemented. The CMA will implement this legislation so we will have to see how it does. Regulators can be a bit hit or miss, take Ofcom, it has done some good work but it can also be too lenient. It made it easier for people to switch mobile providers but did not take punitive measures when the one-touch switch deadline was missed.
