UK govt introduces new legislation for digital economy

28 Apr '23

2 min read

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The UK government has introduced a new bill to protect businesses and consumers in the digital economy.
The bill includes measures to prevent fake reviews and subscription traps, as well as new powers for the CMA to tackle companies that violate consumer rights law.
The CMA will be able to enforce consumer law directly and impose penalties.

The UK government has introduced a new legislation to protect businesses and consumers from rip-offs and ensure that they can take full advantage of the digital economy. The bill includes provisions to prevent fake reviews, subscription traps that cost over a billion pounds per year, and gives new powers to the Competition and Markets Authority (CMA) to tackle companies that breach consumer rights law.

The bill will provide the CMA with stronger tools to investigate competition problems and take faster, more effective action, including in cases where companies collude to inflate prices at the expense of UK consumers. The CMA will be able to directly enforce consumer law, and the consequences for wrongdoers will be increased, with the CMA and the courts having the power to impose penalties of up to 10 per cent of global turnover for breaching consumer law, the UK government said in a press release.

The new legislation will also allow the government to ban the practice of facilitating fake reviews and require businesses to issue a reminder to consumers when a free trial or introductory offer is coming to an end.

As part of the bill, a Digital Markets Unit (DMU) within the CMA will be given new powers to tackle the excessive dominance of a small number of tech companies in the UK. The government’s new digital regime will give the DMU the power to ensure that businesses and consumers are not unfairly disadvantaged by the largest players and have access to dynamic digital markets that will support the growth of the economy.

The DMU will be able to set tailored rules for firms with strategic market status in key digital services, including providing more choice and transparency to customers. If a firm does not abide by these rules, the DMU will have the power to fine them up to 10 per cent of their global turnover, the release added.

Business and trade minister Kevin Hollinrake said, “Consumers deserve better from the tech industry, and 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.”

Fibre2Fashion News Desk (KD)

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