New Bill to Boost Consumer Protection on UK Broadband and Mobile
The Government will today introduce their new Digital Markets, Competition and Consumer Bill (DMCCB), which among other things also promises several new protection measures that could benefit customers of broadband ISPs and mobile operators (e.g. clearer contract information and making it easier to exit a contract).
The Bill, which will amend both the Competition Act 1998 and the Enterprise Act 2002 and make other provisions about competition law, also hands new powers to the Digital Markets Unit (DMU) within the Competition and Markets Authority (CMA) – the competition regulator.
As a result, the CMA will be able to “directly enforce consumer law rather than go through lengthy court processes” and they’ll have the power to impose penalties of up to 10% of global turnover for breaching consumer law. This is relevant because the CMA has recently been undertaking work aimed at clamping down on rip-offs and misleading prices (here).
Advertisement
The DMCCB covers a variety of areas related to all this, but naturally we’re most interested in those that might have some relevance for broadband and mobile packages. One example is the clampdown on “subscription traps,” in which businesses make it difficult for customers to exit their contract.
Tackling Subscription Traps
Under new rules, businesses must:
➤ Provide clearer information to consumers before they enter a subscription contract;
➤ Issue a reminder to consumers that a free trial or low-cost introductory offer is coming to an end, and a reminder before a contract auto-renews onto a new term; and
➤ Ensure consumers can exit a contract in a straightforward, cost-effective and timely way.
Ofcom’s End-of-Contract Notifications (ECN) system already requires all fixed broadband, mobile, home phone and pay TV providers to issue such notifications to existing subscribers at the end of their term (sent by text, email or letter) and the regulator doesn’t allow longer contracts to auto-renew. But the new bill may give some aspects of this a little more teeth.
Paul Scully, Minister for Tech and the Digital Economy, said:
“Today’s announcement shows we are proudly pro-growth and pro-innovation across the board in the tech sector, seeking to open up new opportunities for all firms, however small or large they are, while empowering consumers.
The Prime Minister has made his intention to secure growth and innovation within every corner of our economy very clear – the new Digital Markets Unit will help fulfil this important priority for the UK in the digital economy.”
The bill will also look to tackle the excessive dominance that a small number of tech companies have held over consumers and businesses in the UK, although this has more relevance for companies like Apple and Google (App stores) etc. “It will set rules that will prevent firms with Strategic Market Status from using their size and power to limit digital innovation or market access,” said the Government.
In terms of the above, only firms with substantial and entrenched market power, in at least one digital activity, providing them with a strategic position, will be designated with Strategic Market Status (SMS) by the DMU and will be subject to the new regime. A threshold will apply meaning that only firms with a global turnover above £25bn, or UK turnover above £1bn, will be in scope. The pro-consumer measures we mentioned earlier are separate to this.
Advertisement
At the time of writing, we haven’t yet seen the full text of the bill and so only have a very high-level summary to go off.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
« Truespeed Connect 150th Community Hub to Free Broadband for Life
They should do something about leaving Virgin Media. You tell them I want to cancel. They try to retain you, that’s fine, I expect that. What I don’t like is when you tell them 5 times in a row, I don’t want to negotiate, I don’t want a new contract, I don’t want any deal I just want to quit and you get oh well who are you going to? they can’t guarantee you speed like we can (lmao, right) and how about if we do this or that. I spent no joke 45 minutes on the phone to them telling them no I don’t want to discuss your deals, I don’t want a new contract, I don’t want to tell you who my new ISP is I just want to quit. 5 or 6 times. I even told them I’ve said it to you this many times now just please execute my wishes and end the contract. Oh bbbbut how about this deal, exclusive for you and blah blah .. no. Just quit.
Virgin Media make it very difficult to leave them. I’m ok with being asked do you want me to see if I can offer you a better deal, that’s fine. But I should not have to tell them 5 times no deal, just cancel. And then after that to still hear about deals and offers. You have to have a pretty strong will and a lot of patience to leave VM.
Easy enough if to leave VM if you do it in writing, and then you don’t need to speak with their appalling customer service imbeciles. You will then get a load of outbound retentions calls during your notice period, but they’re easy enough to ignore or put down.
More pointless legislation. All of the things this bill is described as ensuring are already supposedly within Ofcom’s regulations, enforceable with the powers of the Telecommunications Act 2003. And there’s two problems from this – first of all, splitting telecoms regulation between CMA and Ofcom will make things worse and more complex, not better.
The second is that addressing the aspects described won’t stop consumer-unfriendly practices like 18 and 24 month contracts for landlines, or 36 month handset contracts, and it won’t stop unreasonable RPI+lots inflation clauses.
The spirit of Ernest Benn will be enjoying the spectacle of modern government, who seem to have a mission to live up to his words: “Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedies.”
A quick scan of the draft text of the bill shows that it’s the most appalling garbage. It’s too long (388 pages), it’s drafted in impenetrable complex terms that make in inaccessible to lay readers, it covers too many only vaguely related topics, many of the things it wants to achieve could already be covered by active enforcement of existing rules. It replaces CPUT regulations, but still only allows enforcement by the country’s desperately under-resourced trading standard teams, it creates a new regulatory body (DMM) that’s simply not needed, and the vast complexity will provide fertile ground for big tech lawyers to find many loopholes. And finally, being so long it won’t actually get any proper parliamentary or civil society scrutiny, leading to a high likelihood of unintended consequences.
All in all, a shameful, complicated mess, adding to the thousands and thousands of pages of similarly poor legislation that have oozed out of Parliament for many years now.
Mobile and broadband providers in the UK are some of the most heavily regulated companies already. Several pieces of research suggest that this reduces investment and is one of the reason why the UK is behind on mobile technology. How about the government turns its focus to the energy providers – where the profits just keep going up and customers are massively struggling to afford bills??
These people are not tht regulated if they was no way would they get away with what they do.
Openreach is highly regulated.
Not sure what you mean behind technology wise when we are not.
The likes of Virgin has for decades gotten away with awful customer services and not been forced to open up network to others.
You have other companies which are the same Voda have so many people moaning about how they mess up even number ports and what does the customer get nothing (compensation scheme is an opt in one cityfibre not apart of it)
How the misuse of CPI has been allowed is one of the worst ones and the forcing of long contracts yet you are not getting benefits for doing so.
ofcom need to be strict and lay out all companies should offer
12 month
18 month
24 month
not only say 24 month and if you sign 24 month the price is locked none of this yearly price increase.
The last thing is how ofcom has allowed exclusive deals in some areas is anti competitive some areas after years still only have 1 or 2 providers available how is that good for consumers (A friend of mine is approaching 3 years since cityfibre became active in area only Voda is availabe)