What is the Digital Markets, Competition and Consumer Bill?
On 25 April 2023, the Digital Markets, Competition and Consumer Bill was introduced into the House of Commons and is expected to enter into force in 2024. The Bill is designed to:
(a) boost innovation by increasing competition in digital markets;
(b) grow the economy by enhancing the wider competition regime to focus it on the areas of greatest harm; and
(c) protect consumers by strengthening the enforcement of consumer protection law and introducing new consumer rights; and
(d) “stamp out unfair practices and promote competition in digital markets.”
The Bill is largely focussed on stronger regulation of large technology platforms, but does also include some significant changes in UK consumer protection law which will be significant changes to businesses selling direct to consumers (particularly online). These other consumer law changes are what we’ve focussed on here.
Under the Bill, the Competition & Markets Authority (the “CMA”) will be given new powers to impose sanctions directly for breaches of certain consumer protection laws, without the need to go to court.
The CMA will also be able to impose fines for breaching consumer protection law of up to 10% of annual global turnover or £300,000 (whichever is higher). This is a substantial increase in enforcement rights for the CMA and mirrors similar enforcement regimes already in place for competition law and data protection compliance.
The Bill also imposes new obligations on businesses that sell their products or services to consumers on subscription.
Businesses who offer subscriptions will now be required to:
- Provide pre-contract information about the subscription;
- Send reminders to consumers before a free or discounted trial period is about to end or before any auto-renewal and the business must inform the consumer on how to cancel the contract;
- Allow consumers to cancel the contract easily in a single communication and ensure that consumers do not have to take unreasonably steps to end the contract; and
- Give consumers the right to exercise early cancellation rights during the cooling-off period after the subscription/free trial starts, as well as after the free trial ends or each time the subscription period is automatically renewed.
Fake Reviews Online
The new enforcement powers under the Bill will also enable stronger action to be taken in respect of fake online, with it becoming unlawful for businesses to pay someone to write fake reviews for their products or services. Any online platform or site that includes reviews on their site must take reasonable steps to check they are genuine.
What Does the Bill Mean for Businesses?
The Bill is a major change in the way that consumer protection law is enforced in the UK.
Between this Bill and the Data Protection and Digital Information Bill also currently being considered by parliament, 2023 is likely to result in a number of key legal changes that e-commerce businesses will need to comply with.
As a result of this new legislation (once passed into law) e-commerce businesses will need to ensure that:
(a) Where they offer subscriptions, they update their terms and conditions and internal processes for handling subscriptions to comply with the new requirements.
(b) Where they provide review functionality on their websites, they have an up to date acceptable use policy and review their internal processes for monitoring customer feedback to ensure that they have reasonable measures in place to ensure any feedback is genuine
(c) Their existing terms and conditions and other consumer facing policies are up to date and compliant with consumer law generally (given the new enforcement powers and fines for non-compliance).
The Digital Markets, Competition and Consumer Bill is a key turning moment to protect consumers in the UK and ensure large and powerful digital firms are regulated. Based on the legal changes introduced over the last few years and the CMA’s new powers, it is also unlikely to be the last piece of new regulation on the digital markets and e-commerce space.
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