The digital age is accelerating, and with it comes new challenges for consumers hoping to consume with confidence. In recognition of these issues, in April the UK Government responded to its 2021’s consultation on competition and consumer policy with an announcement: new consumer protection measures will be introduced.
These measures will bring changes for businesses that sell online. They will face the challenge of needing to meet more regulatory hurdles. They may also benefit. The new measures could provide structures for businesses to follow, helping them to do business with more integrity and to form more transparent consumer relationships.
It’s not yet clear exactly how the measures will be introduced. No draft bills have been released yet. The Government has, however, provided an overview of the measures that we can expect. They include:
Reviewing the law on fake reviews
New rules are being considered in relation to reviews of businesses, such as those found on travel or consumer directory websites. It could become unlawful to:
- write and submit a fake review
- commission somebody else to write a fake review
- offer to or advertise that you will submit, commission or facilitate fake reviews
- host reviews (ie on your website) without first taking reasonable steps to ascertain whether they are genuine
Subscribing to new standards for subscription models
Lots of online businesses offer consumers subscription models (ie the consumer pays a recurring fee to use the business’ services). Free trials and other cost-saving offers can be used to attract customers to subscription services before the prices are increased. The Government has proposed new measures to help ensure that this sales tactic is not used in an abusive manner.
Businesses that offer subscription models may soon have to:
- give consumers clearer information about the subscription model before a contractual relationship is formed (ie before the customer commits to the subscription)
- make sure that consumers can cancel a subscription in an easy, quick, and cost-effective way
- send consumers reminders if:
- a trial or lower-cost introductory offer is ending soon
- a contract (eg a phone contract) is about to auto-renew onto a new term
What do these changes mean for consumers?
It’s become very common for people to check a business’ online reviews before using its services. Whether that means going to a coffee shop or signing up for an online streaming service. Being able to better trust the reviews that a business provides could help consumers to make confident choices, which are less likely to end in disappointment.
Similarly, being able to trust that they’re not unwittingly signed up to an expensive subscription model may give consumers more confidence when trying out new products and services.
However, the efficacy of these benefits will depend on exactly how the changes are introduced. The wording of the new rules will help determine exactly what is prohibited (eg how much influence must be exerted on a reviewer for a review to be ‘fake’?). And the enforcement strategies used will be important. The Government is strengthening the Competition and Markets Authority’s (CMA’s) enforcement powers in various ways, but it’s not yet certain how enforcement powers may be used to, for example, weed out unreliable reviews.
What do these changes mean for businesses?
The changes may mean that businesses have to do more, and be more careful, in order to meet regulatory requirements when doing business online. It does, however, mean that their consumer relationships will have to become (if they’re not already) quite honest and transparent. This could challenge some businesses to think outside of the box to come up with innovative new ways of attracting and retaining customers which may, ultimately, lead to more lucrative business relationships.
Moreover, eliminating these dubious trading practices in some businesses could create a more level playing field, within which using such practices can no longer offer an unfair competitive advantage to some businesses over others. This could help smaller businesses to compete on more important factors, such as product quality, helping more new small and medium sized businesses (SMEs) to enter various online-based markets.
If you run an SME and you’re uncertain about how to comply with these upcoming measures, you can always Ask a lawyer for advice. To check that your online business is up to date with other regulatory requirements (eg data protection rules), read our legal guide on running an online business.