New UK Consumer Protection Rules May Help Broadband ISP Users UPDATE

The UK Government will today launch a new consultation on ‘Reforming Competition and Consumer Policy’, which among other things promises several new protection measures that could also be extended to help “tackle consumer rip-offs and bad business practices” in the broadband ISP and mobile (telecoms) sector.

The changes broadly reflect the Government’s desire to give the Competition and Markets Authority (CMA) “enhanced powers” to tackle a variety of additional consumer problem areas, although today we’re obviously more interested in those that may have some relevance for broadband and mobile provision.

Sadly, at the time of writing, we couldn’t find the new consultation document online (it doesn’t appear to have been published.. yet) and as a result it’s difficult to give these proposals their full context. But we’ve listed some of the most relevant changes below.

In short, the CMA will be able to wrap up investigations faster and impose stronger penalties on firms that break the law or fail to cooperate with the regulator’s work.

Proposed Changes to UK Consumer Protection Rules

➤ A clampdown on “subscription traps,” which will work by requiring businesses to make it clear exactly what consumers are signing up for and letting them cancel easily. More clarity on products, prices and service features is always welcome.

➤ Punishing businesses that trick or dupe consumers (aka – “dark patterns“) into spending more than they want to (e.g. some online businesses may try to create a sense of false urgency in order to induce people into purchasing something they may not have otherwise bought). Less relevant for the telecoms sector perhaps, as we rarely see such things, but still useful and may impact some comparison sites.

➤ The CMA will be able to enforce consumer law directly, rather than having to go through a court process that can take many months or even years. As part of this, they’ll also be able to accept voluntary binding commitments from businesses at any stage in an investigation, rather than having to wait till the end.

➤ The CMA will gain the power to disqualify company directors who make false declarations to the regulator.

➤ The CMA will be able to block a wider range of harmful mergers, including so-called “killer acquisitions” where big businesses snap up prospective rivals before they can launch new services or products. This could in theory create some interesting debates when we start seeing more consolidation in the new market for alternative FTTP broadband operators. But realistically most of that consolidation will occur between smaller players, at least initially (i.e. the CMA will create an exemption from this burden for SMEs where each party’s turnover is under £10m).

Tough penalties for non-compliance are also being put forward, with new powers for the CMA and “similar enforcers” to hit unscrupulous traders who breach consumer law with fines of up to 10% of their global turnover (e.g. up to 5% of annual turnover and additional daily penalties up to 5% of daily turnover while non-compliance continues), and civil fines for businesses who refuse or give misleading information to enforcers.

Kwasi Kwarteng, UK Business Secretary, said:

“The UK’s economic recovery relies on the strength of our open markets and consumers’ faith in them.

By delivering on our commitment to bolster our competition regime, we’re giving businesses confidence that they’re competing on fair terms, and the public confidence they’re getting a good deal.”

We should point out that the CMA tends to focus its enforcement efforts on larger-scale problems (e.g. those identified to it by Ofcom, the government or lots of complaints), as opposed to individual complaints. For the latter, the best mechanism is to try resolving any problems with your ISP directly first and, failing that, escalating it through the Alternative Dispute Resolution (ADR) process.

We’ll add a link to the consultation document below, once we’ve found it.

UPDATE 4:19pm

The Government has just published the related consultation page on all this (here), which states that it will be taking feedback until 1st October 2021.