UK Government Introduces Bill to Safeguard Consumers Against ‘Subscription Traps’ and Deceptive Reviews Online

The UK’s Competition and Markets Authority (CMA) has proposed a new bill that could fine the biggest tech companies with billions of dollars if they don’t comply with its rules. The multi-faceted bill is designed to protect consumers and promote competition, and would enable the CMA to enforce the law directly without having to go through the courts.

If the bill passes, the CMA’s Digital Markets Unit (DMU) will be able to enforce a set of rules on how companies it deems to have “strategic market status” in key digital services should operate. Although the CMA didn’t name any specific company in its announcement, it is likely that Google, Apple and Amazon will be identified as having strategic market status.

The DMU could require these companies to be more transparent about how their app store review systems work or to open up their data to rivals. For example, in Google’s case, it could be a rival search engine. If these companies fail to comply with the new rules, the DMU could fine them up to 10% of their global turnover. Apple, for example, earned around $283 billion in revenue for 2022, so that could translate into a massive fine worth $28.3 billion.

The new bill will also tackle the problem of “subscription traps,” which is costing UK consumers £1.6 billion ($2 billion) annually. The rules will require businesses, not just the biggest tech companies, to provide customers with clearer information before they start a subscription. Companies will also be required to send customers notifications before their subscription auto-renews and provide customers with an easy way to unsubscribe.

Fake reviews are another concern the bill will address. The new rules would prohibit companies from commissioning fake reviews and from posting reviews without taking steps to ensure that they’re genuine. The rules would also make it illegal to offer or advertise submitting, commissioning and facilitating fake reviews.

The new powers in this bill will help the CMA take swift action against rip-offs, protecting consumers whether they are shopping online or on the high street. The fining powers will provide an important deterrent to businesses seeking to take advantage of people while also ensuring that fair dealing businesses can thrive.

The bill will also strengthen the Digital Markets Unit, helping to ensure digital markets remain competitive and continue to benefit people, businesses, and the UK economy. The CMA welcomes the introduction of the bill to parliament and looks forward to its progression.