New rules could leave major tech companies facing hefty fines  

Regulator to focus on big tech companies and digital practices that cause most harm to consumers with new competition regime

The new digital markets competition laws for scrutinising big tech companies come into force today.

The Digital Markets, Competition and Markets Act 2024 gives new powers to the competition regulator to tackle conduct from big tech companies that could exploit consumers or damage fair competition.

It’s a regime that focuses on the most powerful companies and activities that could cause the most harm to consumers and businesses. 

Firms could face fines of up to 10% of their global revenue.

Alex Neill, co-founder of Consumer Voice, said:

‘To date the biggest tech firms have been able to operate pretty much unchecked – making themselves almost essential to our lives, but often using sneaky hidden tricks that damage competition and leave consumers paying the price.  

For this regulation to be effective firms must have their collars felt early on and it has to be for the most harmful practices. 

Otherwise the fines will just become a cost of doing business.’

A spotlight on big tech

It is only the most powerful tech companies engaged in digital activity that these new rules apply to.

So the Competition and Markets Authority must now start the job of identifying those companies that hold so-called ‘strategic market status’.

These are the companies who are judged to hold significant market power in their provision of digital services to UK consumers and businesses.

Digital activities can include the provision of internet search services, app distribution or online marketplaces.

They must also have global revenues of more than £25 billion, or a UK revenue that exceeds £1 billion. 

So you can expect to see tech titans Google, Microsoft, Meta, Amazon and Apple being lined up as the firms who will face scrutiny and potential penalties for not following the rules.

New rules for conduct

The regulator has the power to impose conduct requirements that will tackle any activities that could exploit consumers and businesses, or undermine competition in the market.

These could include ensuring consumers are treated fairly and are able to choose freely and easily between services or digital content. 

They must also be provided with easy to understand information that enables them to make informed decisions about how they interact with the relevant digital activity.

Any firms flouting rules will be investigated and could face fines of up to 10% of the  firm’s global revenue.

Collective action against big tech

These new rules can change the way these businesses operate to benefit consumers.

‘But they won’t directly lead to compensation for consumers who have lost out as a result of big tech companies abusing their dominant market positions,’ Neill added.

‘That’s why the laws that enable group action against big companies in the UK continue to be an essential consumer right.’

Apple, Amazon, Facebook, Google and Sony all have claims against them seeking compensation for millions of UK consumers. 

Apple is the first of these companies that will go to trial.  

Dr Rachael Kent, a digital economy lecturer, filed a £1.5 billion claim against Apple on behalf of UK consumers and businesses who she says have paid too much in the Apple App Store.

When you pay to download an app or digital content as much as 30% of what you spend goes straight to Apple. 

This is because app developers must use Apple’s payment systems to sell its apps, and it is here where charges are added. 

Kent says Apple has breached competition law by abusing its dominant position by charging these excessive prices. Her trial against Apple begins on 13 January and is expected to last seven weeks.