Draft Digital Markets,
Competition and Consumer Bill
“Draft legislation to promote competition, strengthen consumer
rights and protect households and businesses will be published.
Measures will also be published to create new competition rules
for digital markets and the largest digital firms.”
The purpose of the draft Bill is to:
-
● Protect consumers’ hard-earned cash from scams and
rip-offs and boost consumers’ rights.
-
● Reform the UK’s competition regime, putting the power
in the hands of consumers and strengthening public and
business confidence in the power of free markets to deliver
prosperity.
-
● Create a best in class competition regime, to make
markets for consumer goods and services more competitive and
dynamic, to ensure that consumers get the best deals.
-
● Boost competition by introducing a new regime to
address the far-reaching market power of a small number of
very powerful tech firms.
The main benefits of the draft Bill would be:
-
● Preventing fake reviews so consumers have information
they can trust.
-
● Enabling the Competition and Markets Authority to
take swift and decisive action on behalf of consumers and to
boost competition, ensuring we have an economy where firms
compete to give consumers the best deals.
-
● Providing more choice and better quality services for
consumers and businesses. This will lower prices for everyday
goods and services that rely on online advertising.
-
● Creating opportunities for UK tech companies to
flourish and offer new products and services, which will
drive innovation and a more dynamic digital economy.
-
● Ensuring that businesses across the economy that rely
on very powerful tech firms, including the news publishing
sector, are treated fairly and can succeed without having to
comply with unfair terms.
The main elements of the draft Bill are:
● Tackling subscription traps by requiring businesses to provide
clearer information to consumers and to send reminders before a
contract auto-renews.
-
● Updating consumer law to prohibit commissioning fake
reviews, offering to provide fake reviews, or hosting
consumer reviews without taking reasonable steps to ensure
reviews are genuine.
-
● Strengthening protections for consumers using
Christmas savings clubs and other similar schemes, which are
not currently regulated.
-
● Updating and simplifying regulations for package
travel, so more businesses comply with the law, non-flight
packages are better protected, and the quality of information
and guidance is improved.
-
● Giving the Competition and Markets Authority the
ability to decide for itself when consumer law has been
broken, and to issue monetary penalties for those breaches.
-
● Improving the quality and oversight of services
offering dispute resolution, so consumers have more and
better alternatives to going to court.
-
● Empowering the Digital Markets Unit to designate a
small number of firms who are very powerful in particular
digital activities, such as social media and online search,
with Strategic Market Status. This status will lead to these
firms facing legally enforceable rules and obligations to
ensure they cannot abuse their dominant positions at the
expense of consumers and other businesses.
-
● Giving the Digital Markets Unit powers to proactively
address the root causes of competition issues in digital
markets. It will impose interventions to inject competition
into the market, including obligations on tech firms to
report new mergers and give consumers more choice and control
over their data.
Territorial extent and application
● The consumer policy provisions will extend and apply across
Great Britain. Competition and digital market measures will
extend and apply across the UK.
Key facts
-
● Government research estimates that consumers hold
£1.8 billion worth of unwanted subscriptions and that UK
consumers lose a further £23 billion annually from problems
with purchases and the value of their time in trying to
resolve the problem.
-
● Research from 2015 estimated £23 billion of purchases
a year are influenced by online reviews. Some estimates show
that up to 50 per cent of reviews on popular e-commerce
websites are not genuine and that fake reviews make consumers
more than twice as likely to choose poor-quality products.
-
● The Competition and Markets Authority’s first State
of UK Competition report found that competition across the
economy may have declined in the previous 20 years.
-
● The Competition and Markets Authority has provided
£2.6 billion of net benefit to consumers annually on average
over the past three years. The Authority’s annual impact
assessment 2020-21 estimated that in each year from 2018-19
to 2020-21 the following consumer savings were delivered:
o £110 million from competition enforcement;
o £445 million from merger control;
o £1.88 billion from market studies and investigations; and o
£130 million from consumer protection.
-
● Weak competition in the UK’s digital advertising
market is leading to higher prices for consumers. The
Competition and Markets Authority estimates that consumers
lose £2.4 billion per year from Facebook and Google’s high
advertising prices alone.
-
● The independent Cairncross Review in 2019 identified
an imbalance of bargaining power between news publishers and
digital platforms. The Competition and Markets Authority
found publishers see Google and Facebook as ‘must have’
partners as they provide almost 40 per cent of large
publishers’traffic.
