Major tech firms face the threat of multibillion-pound fines for breaching consumer protection rules under new legislation that will tackle issues including fake online reviews and subscriptions that are difficult to cancel.
The digital markets, competition and consumers bill will empower the UK’s competition watchdog to tackle the “excessive dominance” that a small number of tech firms hold over consumers and businesses.
Firms that are deemed to have “strategic market status” – such as tech firms Google and Apple, and online retailer Amazon – will be given strict rules on how to operate under the bill and face a fine representing up to 10% of global turnover if they breach the new regime.
Without naming these companies, 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. Oversight of major tech firms will be carried out by an arm of the Competition and Markets Authority (CMA), the Digital Markets Unit, which will also decide which firms receive strategic market status.
The bill, which will be tabled in parliament on Tuesday, is expected to become law next year.
The legislation will also target so-called subscription traps in which businesses make it difficult for consumers to quit a contract. Under the new rules, which will not be limited to firms with strategic market status, companies must remind consumers when a free trial or low-cost introductory offer is coming to an end and ensure that a contract can be exited in a “straightforward, cost-effective and timely way”.
The bill will also target fake reviews, although the details will go through a consultation process first. The current draft provisions propose making it illegal to post fake reviews without checking that they are genuine, commission someone to write a fake review or offer to submit one.
Last week, the consumer group Which? warned that Facebook groups offering free products or payment in exchange for fake reviews were still rife on sites including Amazon, Google and Trustpilot.
Kevin Hollinrake, the business and trade minister, said: “From abuse of power by tech giants, to fake reviews, scams and rip-offs like being caught in a subscription trap, consumers deserve better.
“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.”
