Proactive Investors - Big tech firms are set to face tighter competition rules in the UK as the government eyes new legislation designed to strengthen regulatory powers over specific companies.
Proposed rules laid out on Tuesday will allow the Competition and Markets Authority (CMA) to issue fines worth up to 10% of a company’s turnover if they are using size to stamp out competition or unfairly taking payments from users, for instance.
Businesses with a global turnover of £25bn or British turnover of £1bn will be targeted under the new rules, with the CMA able to tailor regulation to specific companies.
“Digital markets offer huge benefits, but only if competition enables businesses of all shapes and sizes the opportunity to succeed,” CMA chief executive Sarah Cardell said.
Companies will be given “strategic market status” by the CMA, which will then set rules preventing their size and power from being used to overcome smaller companies.
Consumers will also get greater protection from “fake reviews, subscription traps and pressure selling,” with the CMA given the power to rule if laws have been broken, rather than cases going to court.
Some £1.6bn is spent each year on these “subscription traps,” according to the government, which the bill will prevent by ensuring companies make it easier to opt out of payments.
“Proposals […] – including the ability to directly impose fines for the first time – are crucial to ensure we can continue cracking down on rip-offs and underhand deals,” Cardell added.
The legislation will be introduced into the House of Commons on Tuesday and follows a similar move from the European Union last year, though the UK’s will unlikely be passed for several months yet.
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