2023 in UK is set to be a landmark year for digital regulation. This is due to the UK’s expected publication of its Digital Markets, Competition and Consumer Bill in March this year, which will give regulators the power to fine companies up to 10% of their global turnover for breaches of consumer law.
The new Bill is set to significantly reform competition and consumer law in the UK, enabling the CMA to enforce against firms that mislead consumers through their e-commerce services. In addition, new digital legislation is also coming into force in other jurisdictions, including Ireland’s Online Safety and Media Regulation Act 2022, California’s Age-Appropriate Design Code Act and Australia’s Online Safety Act 2021.
In the UK, businesses that trade with consumers and sell online have to comply with the Unfair Commercial Practices Directive (2005/29/EC) (“UCPD”). This includes the requirement that businesses displaying customer reviews should not display any false or misleading information about the product and must ensure that such reviews are genuine.
UCPD compliance is an ongoing challenge for many businesses, but there are key measures that can be put in place to mitigate risks. These include:
Data centre and cloud liability caps
When choosing a data centre or cloud provider, businesses should check that they are contractually required to limit their liability to 100% to 150% of the charges paid or payable by the user. This is typically a market-standard limit in the UK, but it is important to review this to ensure that it is appropriate for the service being provided.
Privacy and data protection laws
With the rise of new technologies such as AI, businesses must ensure that they are able to protect their users’ privacy and personal data. The UK’s Data Protection Act 2018 introduced a new data protection duty for businesses to ensure that they have the necessary policies and procedures in place to protect consumers’ privacy.
The ICO’s Innovation Hub is another resource to help innovators build privacy by design into their products and services, while also providing a regulatory sandbox for organisations developing new technologies that involve personal data in the public interest.
Online choice architecture and dark patterns
With consumers increasingly turning to online shopping, it is important that businesses are aware of the pitfalls of using digital design that deceives or manipulates customers into making a wrong decision, potentially leading to consumer harm. This is particularly the case in relation to so-called’subscription traps’ and online selling practices that use countdown timers, time-limited claims and other tactics to entice consumers to buy more products or services than they actually want or need.