UK Digital Consumer Bill could mean huge fines for Apple and Google
The UK's Competition and Markets Authority (CMA) has launched a new digital consumer bill designed to regulate the behavior of major tech companies like Apple and Google. The bill would allow the CMA to impose multibillion-pound fines on companies that breach its rules. In this article, we will examine the key aspects of the UK Digital Consumer Bill and its potential impact on tech giants.
The multifaceted bill is intended to foster competition and protect consumers by giving the CMA the authority to tackle the "excessive dominance" of tech firms, as stated in a government press release. Tech companies that hold "strategic market status" in key digital services will be required to comply with the bill's regulations, or the CMA's Digital Markets Unit (DMU) could impose significant fines.
Companies subject to the new rules
Although the CMA has not specified which companies will be monitored, the new rules will apply to firms with a global turnover exceeding £25 billion or a UK turnover exceeding £1 billion. This means that tech giants like Apple, Google, and Amazon are likely to fall under this definition.
Increased transparency and open access to markets
The DMU will have the power to compel companies to be more transparent about their app stores and review systems. The agency will also be authorized to open up specific markets depending on the situation. For instance, Apple could be required to permit iPhone and iPad users to download apps from alternative app stores, or a search engine like Google could be compelled to provide rivals access to its data.
Subscription traps and contract cancellation
The legislation will also address "subscription traps," in which businesses make it difficult for consumers to cancel a contract. Companies must inform consumers when a free trial or low-cost introductory offer is about to end and ensure that contracts can be terminated in a simple, cost-effective manner.
Penalties for non-compliance
Companies that fail to comply with the DMU's regulations could face fines of up to 10% of their global turnover, and senior managers will be held personally responsible for ensuring compliance with the DMU's demands. Apple earned $283 billion in revenue for 2022, so a hypothetical fine imposed on the company could amount to as much as $28.3 billion.
Parliamentary approval and implementation
The bill, which has been in the works since 2021, will be heard in parliament on Tuesday and will go into effect after receiving parliamentary approval, subject to secondary legislation and the publication of guidance.
This new legislation marks a significant development in the UK's regulation of major tech companies and their practices, and its impact is likely to be felt by Apple, Google, and other tech giants in the coming years.Advertisement