The Digital Markets, Competition, and Consumers (DMCC) Act, which passed on 23 May 2024, will introduce significant reforms to UK competition and consumer protection law and digital regulation (see our update summarising the main changes). In this post, we’ll take a closer look at the Act’s overhaul of the UK consumer protection regime.

In recent years, the CMA has been an increasingly active enforcer of consumer law, and the DMCC Act will empower it to step up its enforcement.  As the CMA noted in its 2024/25 Annual Plan, the DMCC Act will “place consumer protection law on a par with competition law”.  Consumer law enforcement is expected to become a favoured tool in the CMA’s enforcement toolbox, alongside digital regulation under the new “Strategic Market Status” regime (on which see our Digital Regulation Handbook) and traditional antitrust law.

The CMA’s New Direct Enforcement Powers: Infringement Decisions, Fines, and Remedies

The DMCC Act will introduce a new administrative enforcement model for consumer protection law, sitting alongside the CMA’s ability to apply for court orders. The main features of the new model are:

  • Direct enforcement powers. For the first time, the CMA will have direct powers to enforce consumer law. It will no longer need to go to court to establish an infringement, which has on occasion frustrated the CMA’s past enforcement.[1] The CMA will now be able to take decisions itself on whether businesses have infringed consumer law.
  • Investigative powers. Failure to comply with requests for information may incur fines of up to 1% of global annual turnover (or up to 5% of daily turnover for ongoing noncompliance). The CMA may also impose similar fines of up to 1% of global annual turnover for providing materially false or misleading information.
  • Penalties and remedies. The CMA will be able to impose fines of up to 10% of global annual turnover for infringements of consumer law, a major change from the existing regime which has no financial penalties for breaches in civil proceedings. Individuals who act as accessories to infringements by traders may be personally liable for fines of up to £300,000.  The CMA will also have the power to impose remedies on businesses, which may extend to “enhanced consumer measures” to provide redress to consumers and secure future compliance with the law.  Such remedies previously required a court order. 
  • Online interface notices.  The Act empowers the CMA to impose online interface orders at any point if the CMA is satisfied of an infringement, again without a court order.  There is, importantly, no requirement to issue a final infringement notice before imposing online interface notices, as there is with the imposition of enhanced consumer measures.  Online interface notices can include directions for a trader to:
    • remove content from, or modify content on, an online interface;
    • disable or restrict access to an online interface;
    • display a warning to consumers accessing an online interface;
    • delete a fully qualified domain name and take any steps necessary to facilitate the registration of that domain name by the CMA.
  • Appeals. The CMA’s infringement decisions will be appealable on the merits to the High Court. Such appeals must be brought within 60 days of the final infringement notice, while appeals against investigatory sanctions will have a deadline of 28 days.

New Substantive Rules: Subscription Traps, Drip Pricing, and Fake Reviews

As well as bolstering the CMA’s powers, the DMCC Act changes the substantive consumer protection rules, most notably by superseding the Consumer Protection From Unfair Trading Regulations (CPRs).  Significant new rules include:

  • Strict rules governing subscription contracts. Businesses offering subscriptions to UK consumers will be subject to specific obligations in addition to existing contract and consumer law. These include requirements to:
    • Provide specified pre-contractual information (e.g., details of how consumers can end subscriptions and how businesses may change their prices).
    • Send reminder notices at specified times, for instance before a free/lower-cost trial period comes to an end and at six-month intervals after the beginning of the contract and renewals.
    • Allow consumers to terminate a subscription: (i) in a straightforward manner and without having to take steps that are not reasonably necessary; or (ii) by notifying the trader with a clear statement that they are bringing the contract to an end.
    • Introduce 14-day “cooling-off periods” during which consumers can cancel their subscriptions without penalty (e.g., after the start of the subscription or after the end of a free/lower-cost trial period). 
  • Drip pricing as an automatically unfair practice.  The DMCC Act adds a prohibition on traders displaying headline prices that exclude any mandatory fixed fees or the existence and calculation of variable mandatory fees (so-called “drip pricing”).  Such practices are banned irrespective of their impact on the average consumer’s purchasing decisions.  While traders are also required to display delivery charges, these rules do not otherwise extend to optional fees, which only breach consumer law if they cause the average consumer to make a different purchasing decision.
  • Strict rules governing fake reviews.  Fake reviews have also been added to the list of automatically unfair practices.  In particular, it will be automatically unfair for traders to submit or commission another person to write a fake review, or publish consumer reviews or review information in a misleading way. Importantly for online platforms, it will also be unfair to publish consumer reviews or review information without taking “reasonable and proportionate” steps to prevent and remove fake reviews. Going forward, businesses will need to consider proactively what steps they should take to comply with this requirement.
  • The DMCC Act also contains specific rules governing consumer savings schemes and alternative dispute resolution for consumer contract disputes. 

Recent Enforcement Trends: Online Choice Architecture, Green Claims, Subscription Traps, and Fake Reviews

The CMA has been increasingly active in enforcing consumer law in recent years. Businesses should expect the CMA to step up its initiatives using its enforcement and investigative powers. Based on the CMA’s current activities, continued focus is expected in the following areas:

  • Online choice architecture. The CMA has closely scrutinised how businesses design their online interfaces and whether they are unfair for consumers. Its concern is that harmful choice architecture may “distort consumer behaviour and decision making”, leading consumers to purchase unneeded, unsuitable or inferior products, spend more than they want to, or search less for alternatives.[2]
    For example, under the existing court-based regime, the CMA is preparing to launch proceedings against Emma Sleep for a number of allegedly unfair online sales practices, e.g., the CMA is concerned that it is using countdown timers to put pressure on consumers to purchase quickly.[3] Online choice architecture has also been a focus in the CMA’s competition cases and market studies.
  • Green claims. The CMA has been investigating concerns that businesses are using misleading environmental claims to attract consumers. Earlier this year, an investigation scrutinising green claims in the fashion sector resulted in ASOS, Boohoo, and Asda giving undertakings to remedy the CMA’s concerns.[4] The CMA has also launched an investigation into Unilever regarding green claims about certain essential household items (e.g., allegedly unclear statements on recyclability).[5]
  • Subscriptions and fake reviews. The DMCC Act’s new rules on fake reviews and subscriptions will bolster the CMA’s current activity in these areas. In recent years, the CMA’s enforcement action has led Sony and Nintendo to introduce measures to protect online gamers from automatic subscription renewals,[6] while eBay and Meta have given the CMA commitments to tackle fake reviews.[7] Once the DMCC Act comes into force, businesses will have to comply with more stringent upfront obligations in these areas.

Equipped with its new enforcement powers, the CMA will have more clout to tackle these matters in line with its 2024/25 Annual Plan.

Next steps

The DMCC Act is expected to come into force in the autumn of 2024. Ahead of this date, consumer-facing businesses should refresh their compliance with UK consumer in light of the higher-stakes environment they will soon be operating in. New rules require certain businesses to take positive steps to comply, for example by sending reminders regarding online subscriptions and taking reasonable and proportionate steps to remove fake reviews.

With its expanded powers under the DMCC Act, the CMA will have increased flexibility to choose between competition and consumer tools to achieve the best outcomes for consumers. Digital markets—including concerns with online choice architecture, subscriptions, and fake reviews—are likely to be focus areas.   

[1] The CMA suffered high profile losses in court in Personal Current Accounts and Care Homes.

[2] CMA, Online Choice Architecture: How digital design can harm competition and consumers, CMA155 (April 2022), para. 4.2.

[3] See the update on May 29, 2024 to the CMA’s case page for Emma Group: consumer protection case.

[4] CMA, Press Release, Green claims: CMA secures landmark changes from ASOS, Boohoo and Asda, March 27, 2024.

[5] CMA, Press Release, Unilever’s ‘green’ claims come under CMA microscope, December 12, 2023.

[6] CMA, Press Release, CMA welcomes Sony and Nintendo’s gaming subscription improvements, April 13, 2022

[7] CMA, Press Release, Facebook and eBay pledge to combat trading in fake reviews, January 8, 2020.