New powers unveiled aimed at boosting competition, clamping down on fake reviews
New legislation has been introduced to ensure businesses and consumers are protected from rip-offs and can reap the full benefits of the digital economy with confidence.
Fake reviews that cheat customers and cost more than a billion pounds a year and new powers for the Competition and Markets Authority (CMA) to tackle businesses that breach consumer rights law are all elements of today’s far-reaching Bill.
In competitive markets, firms strive to give consumers the best products, most choice, and lowest possible prices. The Bill will provide the CMA with stronger tools to investigate competition problems and take faster, more effective action, including where companies collude to bump-up prices at the expense of UK consumers.
The CMA will be able to directly enforce consumer law rather than go through lengthy court processes. The reforms will also heighten the consequences for wrongdoers as the CMA and the courts will have the power to impose penalties of up to 10% of global turnover for breaching consumer law.
Today’s Bill (April 25) will also enable the Government to ban the practice of facilitating fake reviews or advertising consumer reviews without taking reasonable steps to check they are genuine. New rules will ensure consumers can exit subscriptions in a straightforward, cost-effective, and timely way and require that businesses issue a reminder to consumers when a free trial or introductory offer is coming to an end.
This will help deliver one of the Government’s five priorities to grow the economy by increasing consumer choice and confidence in the products they buy and services they use.
UKHospitality Chief Executive Kate Nicholls said: We’re pleased that the Government has listened to the concerns of hospitality businesses about fake reviews and have taken swift action to tackle it, by giving the CMA enhanced powers through this Bill.
Fake reviews do irreparable damage to businesses, offer consumers a misleading view of a business and devalue the efforts of honest customers leaving genuine feedback. This Bill will help to deliver fairness for both hospitality venues and their customers in this area, and we look forward to working with Government to achieve this.
Rocio Concha, Which? Director of Policy and Advocacy, said:
This bill is a pivotal step to make markets in the UK work better for consumers, businesses and support economic growth.
Whether it’s fake reviews by dishonest businesses or people getting trapped in unwanted and costly subscriptions, our consumer protections are overdue an upgrade. Which? has long campaigned for stronger powers for the Competition and Markets Authority, including tough enforcement and the ability to fine firms that break the law directly.
The empowerment of the CMA’s Digital Markets Unit will also be a major step forward. It needs the right powers to loosen the vice-like grip of a handful of tech giants that will foster innovation and give consumers more choice and lower prices.
Sarah Cardell, Chief Executive of the CMA, said:
The new powers in this bill help the CMA take swift, decisive action to tackle rip offs, protecting consumers whether they are shopping online or on the high street. The new fining powers will provide an important deterrent to businesses seeking to take advantage of people while also ensuring fair dealing businesses can thrive.
The bill will also strengthen the Digital Markets Unit, helping to ensure digital markets remain competitive and continue to benefit people, business, and the UK economy. We welcome its introduction to parliament and look forward to it progressing.