A regulator is to police the “excessive dominance” of big technology platforms with the power to fine them up to 10% of their global turnover under new legislation.
The Digital Markets Unit (DMU), which was launched two years ago within the Competition and Markets Authority (CMA), will be given new powers to ensure that consumers and businesses are not unfairly disadvantaged by the biggest players.
Firms deemed to have “strategic market status” in key digital services could be forced to abide by tailored rules on how they operate or face heavy fines under the draft Digital Markets, Competition and Consumers Bill.
The DMU will be able to carry out targeted interventions to allow start-ups or smaller firms to compete.
The bill will end a period of limbo for the DMU, which was set up without any powers beyond the CMA’s existing arsenal.
New rules will ensure consumers can end subscriptions in a straightforward, cost-effective and timely way and require businesses to send a reminder when a free trial or introductory offer is coming to an end.
Business and Trade Minister Kevin Hollinrake said: “Smartphones and online shopping have profoundly changed the landscape for businesses, consumers and the foundations of a modern thriving economy, which now lie in strong consumer choice, confidence and competition.
“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 today 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.”
CMA chief executive Sarah Cardell said: “The new powers in this bill help the CMA take swift, decisive action to tackle rip offs, protecting consumers whether they are shopping online or on the high street.
“The new fining powers will provide an important deterrent to businesses seeking to take advantage of people while also ensuring 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, business, and the UK economy. We welcome its introduction to parliament and look forward to it progressing.”
Which? director of policy and advocacy Rocio Concha said: “This bill is a pivotal step to make markets in the UK work better for consumers, businesses and support economic growth.
“Whether it’s fake reviews by dishonest businesses or people getting trapped in unwanted and costly subscriptions, our consumer protections are overdue an upgrade.
“Which? has long campaigned for stronger powers for the Competition and Markets Authority, including tough enforcement and the ability to fine firms that break the law directly.
“The empowerment of the CMA’s Digital Markets Unit will also be a major step forward. It needs the right powers to loosen the vice-like grip of a handful of tech giants that will foster innovation and give consumers more choice and lower prices.”