- Apr 12, 2001
The U.K. government has introduced a new bill that would allow the Competition and Markets Authority (CMA) to impose multibillion-pound fines on major tech companies like Apple for breaching its rules.
The multifaceted bill is designed to promote competition and protect consumers by giving the CMA the authority to tackle the "excessive dominance" of tech firms, according to a government press release.
Tech companies that are considered to have "strategic market status" in key digital services will be required to comply with its rules or the agency's Digital Markets Unit (DMU) could slap them with significant fines.
The CMA has not named which firms with "strategic market status" it will be monitoring, but a threshold will apply meaning that only firms with a global turnover above £25 billion, or U.K. turnover above £1 billion, will be in scope, so Apple, Google, and Amazon are likely to come under this definition.
The government said such firms could be required by the DMU to be more transparent about how their app stores and review systems work, and the agency would have powers to open up a specific market depending on the situation. For example, Apple could be told to allow iPhone and iPad users to download apps from alternative app stores, or if it was a search engine like Google, they could be forced to open up their data to rivals.
The legislation will also take aim at "subscription traps," where businesses make it difficult for consumers to cancel a contract. Under the new rules, companies would be required to remind consumers when a free trial or low-cost introductory offer is coming to an end and ensure that a contract can be quit in a cost-effective, straightforward way.
If firms don't abide by the rules set for them, the DMU will have the power to fine them up to 10% of their global turnover and make senior managers personally responsible for ensuring their company complies with the DMU's requests. As a ballpark figure, Apple earned $283 billion in revenue for 2022, so any hypothetical fine could be worth up to $28.3 billion.
In the making since 2021, the bill will be heard in parliament on Tuesday and the new measures will come into effect following parliamentary approval, subject to secondary legislation and the publication of guidance."From abuse of power by tech giants, to fake reviews, scams and rip-offs like being caught in a subscription trap - consumers deserve better," said business and trade minister Kevin Hollinrake. "The new laws we're delivering today will empower the CMA to directly enforce consumer law, strengthen competition in digital markets and ensure that people across the country keep hold of their hard-earned cash."
Article Link: Apple, Google Could Face Large Fines Under New UK Digital Consumer Bill