Consumers have new online protection

The Digital Markets, Competition and Consumers Act has become law after receiving Royal Assent.

The Act paves the way to give consumers rights across the UK, with greater control and clarity over online purchases.

It does this by requiring businesses to provide clearer information to consumers before they enter a subscription contract, remind consumers that their free trial or low-cost trial is coming to an end, and ensure consumers can easily exit a contract.

Unavoidable hidden fees will also need to be included in the initial cost or clearly illustrated at the start of the purchasing journey. This will ensure consumers are clear from the offset about what they’re spending.

The Digital Markets, Competition and Consumers Act will also give new tools to the Competition and Markets Authority (CMA) to address the challenges to competition in digital markets.

These tools will allow the competition regulator to set tailored ‘conduct requirements’ which require a powerful tech company to change the way it operates if it is not treating users fairly. These rules could give consumers the room to freely choose the services they use or stop companies from withholding information consumers need to make good decisions.

The Act also gives the regulator powers to intervene and direct a firm to change its behaviour to boost competition – whether that is to benefit people using smartphones or businesses dependent on cloud services.

The Act will also give new powers to the CMA to closely monitor road fuel prices and report any sign of malpractice to the government.

Only a handful of the most powerful global technology companies will be subject to these new rules if, following an investigation, they are deemed to hold ‘strategic market status’.

If companies fail to comply with decisions made by the CMA, they could be subject to fines reaching tens of billions of pounds. These fines and other measures will be balanced by rigorous checks and balances.