Digital Markets Act gives CMA new tools

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

The government said the Act will give consumers more control and clarity over their purchases and provide the Competition and Markets Authority (CMA) with new tools to address the challenges to competition in digital markets.

The government says that some 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’. It added that if these companies fail to comply with decisions made by the CMA, they could be subject to fines reaching tens of billions of pounds.

Under the new rules, businesses will be required to provide clearer information to consumers before they enter a subscription contract, remind them that a free or low-cost trial is about to end, and ensure that customers can easily exit a contract.

The government added that unavoidable hidden fees will need to be included in the initial cost or clearly illustrated at the start of the purchasing journey, ensuring that consumers are clear from the start about what they are spending.

The new legislation will also allow the CMA to set tailored ‘conduct requirements’ which require tech companies to change the way they operate if users are not being treated fairly.

The government claims that these rules will give consumers the opportunity to choose the services they use and prevent companies from withholding information to make informed decisions.

The Act also gives the regulator powers to intervene and direct a firm to change its practices to boost competition as well as monitor road fuel prices and report signs of malpractice to the government.

Last month the CMA raised concerns about AI foundation models (FMs) and the “whirlwind pace” of their development. The regulator said it had identified an “interconnected web” of over 90 partnerships involving the same firms such as Google, Apple, Meta and Amazon.

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