How the DMCC bill will strengthen consumer rights and transform digital markets

We all rely on the ideal of free and fair markets to ensure that we get the best deal. We also expect that if we are exploited, scammed or taken advantage of by a company’s bad business practices there will be rules and powers that offer us protection. 

The Resolver system has long helped consumers stand up for their rights and hold companies to account via complaint processes and the independent adjudication of regulators. However, in the digital age, there are many new challenges for consumer protection and fair business practices that need to be tackled. 

Last week the Digital Markets, Competition and Consumers Bill (DMCC) was announced by the government. The bill is aimed at protecting consumers, small businesses and promoting growth in the UK economy by ensuring that regulations are able to keep pace with the changes occurring in an age of digital markets. While yet to be approved by parliament, this draft legislation is likely to become a watershed moment for consumer rights in the UK. 

At Resolver, we see the exciting potential of this legislation. The proposed changes are not just to the law, but how it is enforced. It thus stands to provide new avenues and further recourse for consumers challenging bad business practices. 

What will the bill do? 

The DMCC will strengthen the powers of the Competition and Market Authority (CMA) and improve their ability to challenge unfair practices that affect consumers, businesses and the economy as a whole. 

Whether it’s dishonest digital marketing strategies or rip-off products and services, these proposals will give the CMA stronger enforcement powers when a company breaks consumer law. For the very first time they will be able to directly impose fines on businesses who don’t follow regulations. As we see it, this will make them more like an ombudsman – becoming a point of contact and support for consumers pursuing complaints about infringements of their rights.

While there are a number of proposed reforms, there are three main areas of focus: consumer protections, digital markets and competition. 

Consumer protection: more power for the CMA to protect consumers

The CMA exists to protect people from being exploited by unfair business practices. They also seek to protect fair-dealing businesses that may be disadvantaged by companies that break the rules. The kind of unfair practices they must be able to target include those endemic to the digital age, such as fake reviews, subscription traps and pressure-selling.

The new regulations laid out by the DMCC will allow the CMA to decide when a consumer law has been broken. This means that rather than each case having to go through complex and lengthy court processes, bad businesses can be dealt with quickly and people and competing companies can be better protected faster.

This will not simply allow consumers to seek their advice on a complaint. The CMA will actually be able to fine businesses that break the law up to 10% of their global turnover – something which we see as being a very effective deterrent to the bad practices currently proliferating online markets.

Digital markets: digital firms will be held accountable 

In the digital age, online marketplaces for products and services are constantly evolving. Yet as we have seen in widespread practices of fake reviews, there are all kinds of digital marketing strategies that can be less than transparent or fair, and that actively obstruct growth.

We have taken steps to ensure that any reviews or comments posted on the Resolver platform are verified. This prevents unfair or unjustified brand assassination as well as dishonest positive feedback that would mislead other consumers. 

The DMCC legislation, formulated in collaboration with the Digital Markets Unit, will go further than current laws in ensuring that digital firms are accountable for the actions they take and how they compete with other businesses online. Amongst the new rules are regulations that specifically aim to prevent large and powerful firms with Strategic Market Status from using their influence to constrain digital innovation or limit market access to smaller companies. 

Competition: pro-competition laws to ensure growth and protect choice

We want to cultivate more transparency around business practices and give our users the ability to make comparisons between brands so they can make the best choices for them. The very foundation of economic growth is the ability for new products to enter the markets and consumers to have freedom of choice and a variety of options.

With increased powers to investigate and enforce lawful practices, the CMA will be able to identify and prevent unlawful anticompetitive conduct faster and more effectively. 

Changes to the competition framework pay particular attention to cases of mergers that may harm UK consumers or businesses and the fine thresholds for bad practices. These pro-competition laws will strengthen the protection and promotion of open and free markets, ensuring that companies continue to innovate rather than monopolise power or resources and that businesses of all sizes and kinds will have the opportunity to compete and succeed. 

Our verdict: an exciting proposal for consumers and small businesses

At Resolver, we see the kinds of challenges being faced by consumers and small businesses in rapidly changing digital markets and environments. We know that the cost of living crisis has only worsened and intensified the experiences and consequences of rip-offs, dishonest deals and cultures of consumer exploitation. 

For us, these new proposals are exciting for consumers and businesses alike, in that they stand to transform the processes by which consumer protection is provided and how bad business practices can be challenged. 

Rather than pitting consumers and companies against one another, the draft legislation suggests that the few businesses adopting bad practices can be identified and held to account. This will make space for companies that cultivate positive practices and consumer cultures to hold their own in digital markets, providing customers with safety as well as choice. 

For more information about your consumer rights, check out  our rights guides. And if you’re looking to adopt better business practices for your customers, you can read our latest article about conflict resolution. 

If you have any thoughts on this topic, or any other consumer news you would like us to cover, feel free to get in touch with us at support@resolver.co.uk.