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April 3, 2024

How publishers will need to change subscription policies due to Digital Markets Bill

Impacts of Digital Markets Bill for publishers will go beyond the much hoped-for payments from platforms.

By Charlotte Tobitt

Changes to the way publishers sell subscriptions will form a key part of the Digital Markets, Competition and Consumers Bill, which is now reaching the end of its journey through Parliament.

But measures that could have hampered publishers’ ability to secure renewals now look unlikely to reach the statute book.

Much of the focus around the Digital Markets Bill has been about forcing tech giants to pay for their use of news content echoing legislation already enacted in Australia and Canada.

However subscription renewal notices, cooling-off periods and users’ ability to cancel in a “single communication” and “by any means” (leading to the “carrier pigeon amendment”), have all been subject to debate since the Bill was first introduced in April last year.

Recent changes to the bill’s subscription rules in the House of Lords are not expected to be further amended. The rules are not expected to come into force until spring 2026.

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Overall Owen Meredith, chief executive of the News Media Association which represents the UK’s national and regional news businesses, said: “Over the last year or so, the NMA has worked hard alongside colleagues from right across the business and consumer sector to ensure that well-meaning reforms designed to crack down on subscription traps do not unintentionally impact upon legitimate businesses.

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“Subscriptions are increasingly important part of the revenue mix for the creative sector, supporting sustainable business models and continued investment in the services and products that consumers want. We are pleased that the Government has listened and acted upon our concerns.

“We believe that the Bill now strikes the right balance between protecting consumers from bad actors, and allowing creative businesses to engage constructively with consumers who want to use their services.”

Similarly Sajeeda Merali, chief executive of the Professional Publishers’ Association which represents many magazine and digital media brands, said: “We are very happy that the Government has responded to industry concerns pertaining to subscriptions. It shows that they have recognised that the subscription business model is incredibly important, and this is backed up by our own market sector report which showed that subscriptions are the biggest growth area for our publishers.

“We will continue to engage with the Government and regulator to ensure that the policies are implemented in a way that best meets the needs of both businesses and consumers. And we will support our members as they adjust and navigate the change in regulatory landscape.”

What does the Digital Markets, Competition and Consumers Bill mean for publisher subscriptions?

If you can sign up online, you must be able to cancel online

The Digital Markets Bill will introduce a rule that if a consumer enters a subscription contract online, they must be able to end it online.

This will stop businesses, including publishers, from forcing subscribers to phone up and speak to a person in order to cancel.

This may be a blow to some who rely on being able to offer outgoing subscribers better deals and take their feedback in a conversational way on the phone. However they will be able to undertake a similar process online, as below.

‘Single communications’ rule

Previously the Digital Markets Bill stated that a consumer must be able to end their subscription “in a single communication and “without having to take any steps which are not reasonably necessary for bringing the contract to an end”.

Publishers opposed the “single communication” wording because it would have stopped them being able to, in one extra step, offer a cheaper price to renew or another offer.

Users no longer have to be able to cancel ‘by any means’

Another win for publishers is that a requirement for consumers to be able to cancel their subscription “by any means” has been ditched.

This would have meant subscribers could have sent notice of their cancellation by post, email, phone, third-party platforms or any other medium they saw fit – even if that was not supported by the business, potentially adding confusion and stretching resources particularly at smaller publishers.

It also would have stopped the possibility of subscribers being told about lower-priced offers before they cancelled.

Lord Ed Vaizey told the Grand Committee stage of examining the Bill in February that the wording was too vague as to how people could cancel and backed “the carrier pigeon amendment” to improve it.

“It is drafted in such a way that, in theory, I could cancel my subscription to The Times – which I would never do, obviously – by sending a carrier pigeon to News UK at London Bridge and say with a straight face that I had done it authentically,” the Times Radio host and former culture secretary said.

He added that there should be a “happy medium” for both businesses and consumers: “It should be very straightforward to cancel a subscription.”

The Conservative peer said he once “took out a subscription to a newspaper to read an article, but I could not cancel it. It was just my luck that I happened to know the chief executive of the newspaper, and I had to ring him and ask him to cancel it for me. That is obviously unacceptable.”

Limit on renewal notice information dropped

Previously the Bill strictly limited the amount of information that could be included in subscription renewal notices.

Businesses would have been required to send them separately from all other information – meaning publishers for example would not have been allowed to include information about how much a user had accessed the subscription or what benefits they would lose if they did not renew, both things that can help retention.

However that has now been dropped via a Government amendment at the Bill’s third reading last week.

Lord Malcolm Offord, the Conservative minister who helped to lead the Bill through the Lords, said last week that now “other information can be given at the same time as a reminder notice, so long as the required information is the most prominent information.

“This amendment will ensure that the Bill strikes a better balance between ensuring that consumers are reminded about their ongoing subscription while enabling businesses to streamline their communications and provide other information which they consider to be useful to consumers in these notices.”

Cooling-off periods

While the rest of the relevant parts of the Bill update a plethora of existing subscriptions law, the proposed revisions to cooling-off periods in particular evolve the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs).

The CCRs included the right to cancel and receive a refund within 14 days of taking out a contract, otherwise known as a cooling-off period. However that legislation stated that if someone accessed digital content they lost their right to cancel.

The Digital Markets Bill as it originally stood would have meant people could in fact cancel even if they used the product – meaning they could abuse the system by binge-watching a series on Netflix or reading a portion of a newspaper or magazine’s back catalogue and then asking for a refund.

Now, although this has not been definitively removed, the Bill states that the Secretary of State will have the power to introduce a “provision that a consumer may lose the right to cancel a subscription contract during a cooling-off period if they choose to be supplied with digital content or services under the contract during that period”.

This will be explored further in a consultation to begin later this year, Press Gazette understands, which will the potential introduction of a “use-it-and-lose-it” rule.

The Digital Markets Bill has, however, also added other 14-day cooling-off periods into the subscription journey including at the point of renewing an annual contract or when going from an initial discounted price to full price. At these points publishers will have to tell subscribers that they have the right to cancel within that period and how they can do so.

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
  • Business owner/co-owner
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  • Manager
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  • Other
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