Tighter regulations for digital markets become law

The Digital Markets, Competition and Consumers Act has become law after gaining Royal Assent, strengthening consumer protections online.

The Act brings in new rules about how businesses communicate pricing in online transactions, as well as regulating subscription contracts for consumers.

New rules will require businesses to remind consumers that their free trial or low-cost trial is coming to an end, and ensure consumers can easily exit a contract. Processing costs and other hidden fees will also need to be communicated clearly at the start of the purchasing journey to ensure consumers are clear about pricing from the start of the buying 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 allowed to set ‘conduct requirements’ to ensure large tech companies do not abuse market dominance and treat users fairly.

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.??

Only the largest and most powerful global firms are expected to be subject to these new regulations if, following an investigation, they are seen to hold ‘strategic market status’, with non-compliance risking fines in the region of tens of billions of pounds.

Alongside being able to intervene in digital markets, the new law also grants the CMA powers to monitor road fuel prices and report signs of malpractice to government.