Stricter regulation of digital markets becomes law

The Digital Markets, Competition and Consumer Bill became law following Royal Assent, strengthening consumer protection online.

The Act introduces new rules for informing entrepreneurs about prices in online transactions, and also regulates subscription agreements concluded with consumers.

The new rules will require businesses to remind consumers that their free or low-cost trial period is coming to an end, and to ensure that consumers can easily withdraw from the contract. Processing costs and other hidden fees will also need to be clearly communicated at the beginning of the purchasing journey to ensure consumers are clear on pricing from the beginning of the purchasing process.

The new law will also give the Competition and Markets Authority and other regulators greater powers to intervene in digital markets. The CMA will be able to set “conduct requirements” to ensure big tech companies do not abuse their market dominance and treat users fairly.

The bill also gives the regulator the power to intervene and order a company to change its behavior to increase competition – whether that is to benefit people using smartphones or companies that depend on cloud services.

Only the largest and most powerful global companies are expected to be covered by these new rules if an investigation finds they have “strategic market status”, and they face penalties of tens of billions of pounds for non-compliance.

As well as being able to intervene in digital markets, the new law also gives the CMA powers to monitor road fuel prices and report signs of abuse to the government.