The Digital Markets, Competition and Consumers Bill is expected to come into force in the United Kingdom in 2024. Among the proposed provisions will be new obligations around subscription services. Some industry players have been expressing their reservations about the proposed legislation, including a provision to allow consumers to cancel a subscription contract within 14 days for any reason.

The proposed legislation will, among other things, underpin and provide statutory powers for the Digital Markets Unit within the Competition and Markets Authority, which will oversee a new digital regulatory regime, intended to promote greater competition and innovation in digital markets and protect consumers and businesses from unfair practices.

These include powers to designate businesses with strategic market status, which have turnover of either £25 billion globally or £1 billion in the United Kingdom and involved in digital activity.

This is intended to ensure that designated undertakings comply with rules on how they treat consumers and other businesses in relation to the activities for which they have strategic market status.

The draft legislation will give the Competition and Markets Authority the power to impose penalties on firms for breaches, including fines of up to 10% their global turnover.

It will also reform aspects of competition law on merger control, market inquiries and the cartel offence.

Among more general consumer protections will be new rules on subscription contracts, requiring traders to give specific pre-contract information to consumers, to send reminders before a contract rolls over or auto-renews into a new term, and to ensure that consumers have a straight-forward, cost-effective, and timely mechanism to terminate the subscription contract.

One of the provisions is a 14-day “cooling-off” period that would give consumers the right to cancel a subscription for any reason, without any restriction or conditions.

Failure by a trader to provide pre-contract information to consumers about the cooling-off period would be a criminal offence.

As the bill goes through its committee stage, various parties have provided written submissions.

Sky expressed serious concerns about the subscription proposals, arguing that they are too prescriptive and broadly drawn.

COBA, the association for commercial broadcasters and on-demand services, also suggested that the subscription proposals could be more onerous than in the rest of Europe and most of the world.

The Walt Disney Company expressed concern about what it called a one-size-fits-all approach that it said imposes obligations that go far beyond consumer expectations.

A consequence of the proposed legislation could be that consumers could effectively trial any online video subscription service for 14 days without cost.

While some online video services have offered free trial periods to promote their services, in many cases these are no longer offered.