Apple, Google Could Face Large Fines Under New UK Digital Consumer Bill

[MacRumors]

The U.K. government has introduced a new bill that would allow the Competition and Markets Authority (CMA) to impose multibillion-pound fines on major tech companies like Apple for breaching its rules.

The multifaceted bill is designed to promote competition and protect consumers by giving the CMA the authority to tackle the "excessive dominance" of tech firms, according to a government press release.

Tech companies that are considered to have "strategic market status" in key digital services will be required to comply with its rules or the agency's Digital Markets Unit (DMU) could slap them with significant fines.

The CMA has not named which firms with "strategic market status" it will be monitoring, but a threshold will apply meaning that only firms with a global turnover above £25 billion, or U.K. turnover above £1 billion, will be in scope, so Apple, Google, and Amazon are likely to come under this definition.

The government said such firms could be required by the DMU to be more transparent about how their app stores and review systems work, and the agency would have powers to open up a specific market depending on the situation. For example, Apple could be told to allow iPhone and iPad users to download apps from alternative app stores, or if it was a search engine like Google, they could be forced to open up their data to rivals.

The legislation will also take aim at "subscription traps," where businesses make it difficult for consumers to cancel a contract. Under the new rules, companies would be required to remind consumers when a free trial or low-cost introductory offer is coming to an end and ensure that a contract can be quit in a cost-effective, straightforward way.

If firms don't abide by the rules set for them, the DMU will have the power to fine them up to 10% of their global turnover and make senior managers personally responsible for ensuring their company complies with the DMU's requests. As a ballpark figure, Apple earned $283 billion in revenue for 2022, so any hypothetical fine could be worth up to $28.3 billion.

"From abuse of power by tech giants, to fake reviews, scams and rip-offs like being caught in a subscription trap - consumers deserve better," said business and trade minister Kevin Hollinrake. "The new laws we're delivering today will empower the CMA to directly enforce consumer law, strengthen competition in digital markets and ensure that people across the country keep hold of their hard-earned cash."

In the making since 2021, the bill will be heard in parliament on Tuesday and the new measures will come into effect following parliamentary approval, subject to secondary legislation and the publication of guidance.

Article Link: Apple, Google Could Face Large Fines Under New UK Digital Consumer Bill

 

[surfzen21]

Fines collected should go to social programs and not tax cuts for companies.

 

[senttoschool]

Just another country unable to compete so they resort to regulation.

Europeans often complain that goods and services are more expensive in the EU/UK. Here's a good example why.

 

[Realityck]

The UK's Competition and Markets Authority (CMA) has introduced a new bill that would allow it to impose multibillion-pound fines on major tech companies like Apple for breaching its rules.

If firms don't abide by the rules set for them, the DMU will have the power to fine them up to 10% of their global turnover and make senior managers personally responsible for ensuring their company complies with the DMU's requests. As a ballpark figure, Apple earned $283 billion in revenue for 2022, so any hypothetical fine could be worth up to $28.3 billion

i don’t buy into the logic of a global turnover being used for fines compared to just the UK activity seems excessive even it’s only 10%.

 

[Skyscraperfan]

The fact that Google still exists shows that governments do not really take that matter seriously. Google collects so much user data without consent that it would go bankrupt if it just had to pay $50 to every user.

Remember when Google started scanning books and making them available without the authors permission. Google also tracks the location of users even if they opt out. If someone rejects Google cookies, Google uses browser fingerprinting, which is clearly designed to track people against their will. The while reason why Android exists is just collectiing user data. Google does not really innovate. The buy innovative companies and rebrand them a Google product. For example Keyhole, which is now Google Earth. While it still was Keyhole, you had to pay money for that services. Now you have to pay with your privacy. It is shocking that people still use Gmail or Google Chrome.

Google usually bribes itself out of problems like that. Most countries would like Google offices on their territory. So Google has a lot of leverage. I am so proud of that the Berlin citizens told Google to f... off. That was quite unprecedented.

As long as creating detailed profiles of people to sell ads is still profitable, companies like Google will become more and more powerful. So government have to step in and stop that business model. Google is so rich that it was even able to bribe Apple into making Google the default search engine. They paid an 11 digit amount per year for that. So you can imagine how much money they make with turning user data into as revenue.

 

[Vol Braakzakje]

I always wonder what would happen if Google and Apple and Amazon just stop serving the UK. I mean, it's a big market, but is it worth giving up their algorithms?
The citizens won't be happy when they can't use these platforms anymore.

 

[k1121j]

Haha they want to allow side loading.... Good luck enforcing the easy to cancel subscriptions and even better luck later trying to enforce ease of refunds. hahahahahahahahahahahahahah

 

[MacProFCP]

I understand that free markets need to maintain some level of regulation to ensure competition, but the EU and UK governments are heading directly towards socialism. Tried and failed.

Again, I do believe in some level of oversight. But that oversight hurts the consumer when governments are actively involved in business which stifles ambition, creativity and, most importantly, financial investment.

 

[Skyscraperfan]

I always wonder what would happen if Google and Apple and Amazon just stop serving the UK. I mean, it's a big market, but is it worth giving up their algorithms?
The citizens won't be happy when they can't use these platforms anymore.

They will soon have great local alternatives that at the moment can't grow because of the market power of the huge companies.

 

[Shirasaki]

That fine looks like a business-related cost to me, rather than something that would alert Apple, Google, Amazon to “behave better”.
On top of that, I just think it could be too little too late for governments to tame those beasts, while beasts will do whatever they can to make sure consumers are the one paying all of those fines regardless, nullifying the effectiveness of those new regulations.

 

[CJM]

That fine looks like a business-related cost to me, rather than something that would alert Apple, Google, Amazon to “behave better”.
On top of that, I just think it could be too little too late for governments to tame those beasts, while beasts will do whatever they can to make sure consumers are the one paying all of those fines regardless, nullifying the effectiveness of those new regulations.

Wait, you think $28B is a 'business-related cost'?

 

[Sciomar]

At least they're being transparent in their attempt to steal IP instead of covert like some other countries.

 

[genovelle]

Haha they want to allow side loading.... Good luck enforcing the easy to cancel subscriptions and even better luck later trying to enforce ease of refunds. hahahahahahahahahahahahahah

They have no idea how big Pandora’s box really is.

 

[coffeemilktea]

They will soon have great local alternatives that at the moment can't grow because of the market power of the huge companies.

"Great local alternatives" That's believable in other countries, but in the UK?

The Finns have Nokia, the French have Alcatel, the Koreans have Samsung (and in a happier time, LG), and the Chinese have more than everyone else combined.

The British have... uh... positive attitudes?

 

[laptech]

I always wonder what would happen if Google and Apple and Amazon just stop serving the UK. I mean, it's a big market, but is it worth giving up their algorithms?
The citizens won't be happy when they can't use these platforms anymore.

I think you will find the country can cope without those companies. The country was doing just fine with mobile phones from Nokia, Motorola, NEC, Ericsson, Sony and others before Apple came in with the iphone (some don't exist any more). Apple computers was never a big market in the UK compared to else where so again it's citizens will not suffer. Losing Amazon would allow business to come back into the highstreets again. So no, in my opinion losing those 3 companies will not affect the UK much. There will always be people who will moan and complain about losing something.

Oh and considering each of those companies have done their level best to avoid paying the proper amount of tax to the UK I doubt the UK government will miss the tax contributions.

 

[macconservative]

Fines collected should go to social programs and not tax cuts for companies.

I remember when states got the Tobacco suit money that was supposed to go to health programs. Well politicians with money available will start new programs with it and when that money runs out then they start using tax revenue for the ongoing support of that program. I think the money should be sent back to the citizens if that is who the government says is being hurt by these companies

 

[macconservative]

Haha they want to allow side loading.... Good luck enforcing the easy to cancel subscriptions and even better luck later trying to enforce ease of refunds. hahahahahahahahahahahahahah

Yes I get reminders when trials or subscriptions are being renewed. Not that hard to set a reminder to cancel something. Oh wait I forgot we can't expect people to be responsible for themselves

 

[contacos]

sounds like they adapted the one from the EU

Just another country unable to compete so they resort to regulation.

Europeans often complain that goods and services are more expensive in the EU/UK. Here's a good example why.

You think those regulations are bad? Google what an "Ordnungsamt" is.

Here are a few examples of Germany:

1. You are not allowed to vacuum clean between 1pm and 3 pm (resting hour) or Sundays*
2. You are not allowed to throw away your glass after 7 pm or on Sundays (too much noise)
3. Your dog leash is only allowed to be 1 meters on streets or 2 meters at parks **
4. You are not allowed to wash your car on the street (oil could spill to the ground water)
5. Your dog is only allowed to bark 30 minutes per day, only 10 minutes at a time. No barking between 1 pm and 3 pm and 7 pm to 8 am
6. No loud noise after 10 pm (neighbors are very serious about that one!)

I could go on and on

*people still do it and so do I but if you have a bad relationship with your neighbours, they could call the "Ordnungsamt"
** depends on the city / state

Note: I only posted this to point out the cultural differences and why those company regulations may seem excessive to Americans but pretty normal and reasonable to us since we are "used to it"

 

[I7guy]

More times than not, I just think apple and google should leave the UK and EU. Nothing says a private company has to do business anywhere.

 

[spazzcat]

sounds like they adapted the one from the EU



You think those regulations are bad? Google what an "Ordnungsamt" is.

Here are a few examples of Germany:

1. You are not allowed to vacuum clean between 1pm and 3 pm (resting hour) or Sundays*
2. You are not allowed to throw away your glass after 7 pm or on Sundays (too much noise)
3. Your dog leash is only allowed to be 1 meters on streets or 2 meters at parks **
4. You are not allowed to wash your car on the street (oil could spill to the ground water)
5. Your dog is only allowed to bark 30 minutes per day, only 10 minutes at a time. No barking between 1 pm and 3 pm and 7 pm to 8 am
6. No loud noise after 10 pm (neighbors are very serious about that one!)

I could go on and on

*people still do it and so do I but if you have a bad relationship with your neighbours, they could call the "Ordnungsamt"
** depends on the city / state

Note: I only posted this to point out the cultural differences and why those company regulations seem excessive to americans but pretty normal and reasonable to us since we are "used to it"

Number 5 needs to be a law everywhere ...

 

[spazzcat]

Isn't MasterCard or Visa getting ready to force notifications of renewals before you renew them?

 

[kanki1985]

The country was doing just fine with mobile phones from Nokia, Motorola, NEC, Ericsson, Sony and others before Apple came in with the iphone

Ya, no, I dont think anyone would remember what hellholes Sony and Nokia were before Apple came along. Expensive phones, terrible functionality, arrogant customer service. Thank goodness Apple came along.

 

[spazzcat]

Wait, you think $28B is a 'business-related cost'?

How much does Apple Gross in the UK? How much do they net? This could easily lead to companies moving out of the UK.

 

[User 6502]

I understand that free markets need to maintain some level of regulation to ensure competition, but the EU and UK governments are heading directly towards socialism. Tried and failed.

Again, I do believe in some level of oversight. But that oversight hurts the consumer when governments are actively involved in business which stifles ambition, creativity and, most importantly, financial investment.

How cute, the all American obsession with socialism. For some Americans even having healthcare free to the point of access is ‘socialist’. Go figure…

 

[User 6502]

More times than not, I just think apple and google should leave the UK and EU. Nothing says a private company has to do business anywhere.

Sure they can. It would be a bit hard to explain it to their shareholders though. Leaving the biggest common market area in the globe is stupid at best.