Breaching consumer protection rules under new legislation that addresses problems like fake online reviews and subscriptions that pose a challenge for consumers to cancel, major tech companies face multibillion-pound fines.
The UK’s competition watchdog will be in a position to observe the “excessive dominance” of a small number of tech companies in the digital markets, competition, and consumer bills holding over consumers and businesses.
Under the new rules, tech firms like Google and Apple and online retailer Amazon will be given strict rules regarding their operations, and for breaching these rules, these companies will have to pay a hefty fine of 10% of their global turnover.
Intending to open up their data to rival search engines or increase transparency regarding their app stores and review systems, the government aimed its remarks at these companies without naming them. The Digital Markets Unit, a division of the Competition and Markets Authority (CMA), will be in charge of monitoring large Internet companies and selecting which ones will be granted strategic market status.
The bill is proposed to be passed in parliament on Tuesday and is anticipated to become law next year.
The new legislation also targets subscription traps set up by businesses to make it difficult for customers to cancel their contracts. The new regulations mandate that businesses notify customers when a free trial or low-cost introductory offer is about to expire and make sure that contracts may be terminated in a “straightforward, cost-effective, and timely manner.” These requirements will not just apply to businesses with strategic market status.
Though the details will first go through a consultation process, the new rules also target fake reviews. Under the new rule, posting fake reviews or paying someone to submit one without checking the legitimacy of the review is deemed illegal.
Last week, the consumer group Which? warned Facebook groups that offer free products or payments for posting a fake review. Posting fake reviews on sites like Amazon, Google, and Trustpilot is also illegal.
The business and trade minister, Kevin Hollinrake, stated: “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.”
- Published By Team Timeswire