Marketers back new digital law to fight rogue firms

While the data protection reforms might have slipped through the net, the marketing industry has welcomed the fact that the Digital Markets, Competition & Consumers Act 2024 received Royal Assent over the weekend, amid claims it will provide some much-needed regulation on a number of illegitimate marketing tactics used by consumer brands.

The Act paves the way to give consumers rights across the UK, with greater control and clarity over online purchases by requiring businesses to provide clearer information to consumers before they enter a subscription contract, remind consumers that their free trial or low-cost trial is coming to an end, and ensure consumers can easily exit a contract.

Unavoidable hidden fees will also need to be included in the initial cost or clearly illustrated at the start of the purchasing journey. This will ensure consumers are clear from the offset about what they are spending, ministers insist.

The Act will also give new tools to the Competition & Markets Authority to address the challenges to competition in digital markets.

These tools will allow the competition regulator to set tailored ‘conduct requirements’ which require powerful tech companies to change the way they operate if they are deemed to be not treating users fairly. These rules could give consumers the room to freely choose the services they use or stop companies from withholding information consumers need to make good decisions.

The Act also gives the regulator powers to intervene and direct a firm to change its behaviour to boost competition – whether that is to benefit people using smartphones or businesses dependent on cloud services.

The Act will also give new powers to the CMA to closely monitor road fuel prices and report any sign of malpractice to the government.

Only a handful 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’.

If companies fail to comply with decisions made by the CMA, they could be subject to fines reaching tens of billions of pounds. These fines and other measures will be balanced by rigorous checks and balances.

Chartered Institute of Marketing chief executive Chris Daly commented: “The new regulations are a positive step towards removing some of the tools that unscrupulous businesses use to mislead customers.

“For too long has drip pricing been the go-to tactic for luring consumers in before hitting them with extensive and extortionate fees. It is a lazy and unfair way to attract sales and undermines the legitimate marketing innovations that brands should be using.

“In a similar vein, fake reviews also erode the trust of consumers as sellers seek a shortcut to authenticity. We welcome the banning of these irresponsible and unethical practices and look forward to seeing a fairer marketing industry that protects its consumers.”