Netflix subscribers, dating app users, and customers of news publications could face higher prices from the start of next year following the government's decision to accelerate its plans for new subscription rules.
Businesses have warned they have been given "little to no time" to make necessary changes before the new deadline. The government unexpectedly brought forward the restrictions, with the new regime now due to begin in January rather than next spring as previously promised.
Costs likely passed to customers
A source close to a coalition of businesses including publishers and tech firms said the abrupt change would force companies to bring their operations into line more quickly. Those costs would then likely be passed on to customers.
The changes are part of a package of "everyday fixes" announced by Prime Minister Andy Burnham as measures intended to help ease the cost-of-living crisis.
New rules target 'subscription traps'
From January, new rules will target what Mr Burnham has described as "subscription traps". These include arrangements where companies make it difficult for customers to cancel subscriptions or require them to renew at a higher cost than the price originally advertised.
Under the new system, firms will have to make subscription costs clearer at the outset, provide regular reminders, and offer customers an easier way to leave contracts. Customers will also receive a 14-day "cooling-off period", allowing them to cancel subscriptions after a trial period ends or whenever a long-term contract renews.
Estimated savings vs. business concerns
Mr Burnham estimated that the measures would save around £14 each month per unwanted subscription. However, businesses have warned that the changes could instead result in higher costs being passed on to consumers.
The timetable has become a particular concern for companies whose income relies heavily on subscriptions, reports the Daily Mail.
Coalition criticises 'rushed' announcement
In April, when the government was led by Sir Keir Starmer, firms were told that the new rules would not come into effect until spring 2027. The subsequent decision to move the deadline forward to the start of the year left many businesses blindsided.
A coalition of businesses and trade organisations representing newspaper publishers and the UK's tech and media sectors said the "rushed" announcement had broken previous promises. The organisations said businesses had been left with "little to no time to prepare" for the changes.
"We are deeply disappointed that, despite repeated assurances about a proper implementation period, ministers have decided to rush forward with the new subscriptions regime, leaving businesses with little or no time to prepare," the coalition said in a statement.
They added: "Ultimately it is consumers who will be short-changed, as the businesses providing services enjoyed and relied upon by millions are left scrambling to adapt to an entirely arbitrary new deadline – diverting valuable resources that would otherwise go into building better products."
Media industry impact
The impact on the media industry has also been highlighted by Theo Bamber, head of the News Media Association, which represents national, regional, and local news organisations in the UK. Mr Bamber said the "drastically reduced" timetable placed a "key growth area" for media firms at risk.
Subscription models are particularly important to local news organisations, which the government has stated a desire to support, he pointed out. They are also "crucial" to the success of Mr Burnham's wish to devolve more political power out of London to the UK regions, he said.
Mr Bamber has called on the Competition and Markets Authority, the watchdog responsible for enforcing the new rules, to establish an "adjustment period" and "support businesses" as they work to comply.
The warning comes as companies face a substantially earlier deadline for implementing the subscription changes, raising concerns that the costs of adapting to the new regime could ultimately be passed on to customers.
