We have all been eagerly anticipating the Digital Markets, Competition and Consumers Act 2024 ("DMCCA") for a while - it was first floated in a Green Paper back in 2018. We have now had confirmation from the Competition and Markets Authority (the "CMA") that the new consumer law enforcement regime will come into force on 6 April. The final countdown begins…

We wanted to take this opportunity to remind you of the impact the DMCCA will have on consumer laws. While we assume your preparations are underway, we also want to flag that now is the time to fine tune your plans to ensure compliance. The latest CMA statements hint at a sort-of 'grace period' in some areas, but, at the same time, the regulator is clear that there will be early enforcement in relation to "egregious breaches" (which we take to mean breaches where the guidance/laws are already clear).

This article is, of course, not a substitute for reading the DMCCA and the associated guidance as a whole but is intended to be a short summary.

What should I expect?

While the DMCCA was passed in May last year, the consumer law-focused aspects are not yet in force. The CMA announced this month that the enforcement regime (and the CMAs new powers) would be in place as from 6 April. 

In readiness for this, the regulator has published procedural guidance on direct consumer enforcement  and has announced that it will publish, before this 6 April date: an approach document (which will include detail on the CMAs enforcement priorities for the first 12 months); unfair commercial practices guidance (developed from the existing draft); and consumer protection regime guidance. This will all be key reading once available!

In relation to the other consumer law aspects of the DMCCA, we have the following timeline, and we can all mark our calendars accordingly…

The Digital Markets, Competition and Consumers Act 2024 (Commencement No. 2) Regulations 2025 is clear that the rules around new savings schemes will come into force on 1 January 2026.

We still don't have clarity about exactly when the new rules around subscriptions will come into force; however, they are not expected until the spring of 2026 "at the earliest".

How does it affect consumer laws?

At the highest level, the DMCCA increases the level of risk attached to unfair commercial practices, including misleading marketing, directed at consumers. While it largely repeals and restates existing consumer protection legislation, it also introduces new regulations around certain trading practices, strengthens the regulator's enforcement powers and provides for new, more significant penalties.

What new powers will the CMA have?

Given the CMA's new powers are part of the 6 April changes, we will start by looking at enforcement and sanctions.

The DMCCA substantially strengthens the CMA's powers to enforce consumer protection law and enhances the CMA's role in enforcement: the CMA no longer needs to rely on court proceedings to enforce breaches and can instead directly investigate infringements and take direct action to tackle breaches, including through fines and redress.

The expectation is that this will speed up investigations and processes and may also lead to more investigations. 

In addition to its investigatory powers, the CMA will be able to impose fines directly.  These fines are more akin to those we have come to see in relation to issues such as data protection, with maximum fines of up to £300,000 or 10% of a company's global turnover (whichever is greater) for offences under key consumer laws (not only the DMCCA but also wider consumer protection legislation).

Individuals can also be fined and could face up to 2 years imprisonment following a summary conviction.

In terms of where the CMA will be directing its new powers, the CMA noted that early enforcement will likely focus on more egregious breaches, highlighting the following examples:

  • aggressive sales practices that prey on vulnerability;
  • providing information to consumers that is objectively false;
  • contract terms that are very obviously imbalanced and unfair;
  • behaviour where the CMA has already put down a clear marker through its previous enforcement work;
  • where the law tells us that a practice is always unfair.

Areas where the CMA could be said to have already put down a clear marker may well include, for example, 'greenwashing' and 'online choice architecture' (or "dark patterns") which nudge consumers to make choices they didn't mean to make online.

How will it impact unfair trading legislation?

Next on the agenda (and also part of the changes due on 6 April) is unfair trading where the DMCCA largely repeals and restates the Consumer Protection from Unfair Trading Regulations (the "CPRs").  There are a few points to note:

  • the 'always unfair' practices (being those that are so unfair it doesn't matter whether or not it would impact upon a transactional decision) are largely replicated from the CPRs, but also include some slight language changes which result in a wider application (e.g. " Falsely stating that a product will only be available for a limited time");
  • the DMCCA makes it a banned practice to submit, commission or write fake or misleading reviews. There is also an obligation on businesses to "take reasonable and proportionate steps" to prevent the publication of fake or misleading reviews. The expectations in relation to the latter are unclear and the good news is that the CMA noted they recognise that these new provisions may require changes to systems and compliance programmes and, therefore, for the first 3 months of the new regime, they will focus on supporting businesses with compliance rather than enforcement; and
  • it will now also be considered unfair if material information is omitted from an "invitation to purchase", whether or not the omission would impact upon a transactional decision. The information considered material by the DMCCA includes the main characteristics of the product and price.

The adjusted requirements around "invitations to purchase" are intended to help the regulator tackle concerns around "drip pricing" (i.e. enticing consumers with lower headline prices, while revealing additional charges later in the checkout process, such that the full amount to be paid is only revealed when the consumer is about to complete the purchase).

The CMA has announced it is taking a phased approach to 'drip pricing' as follows:

  • in April, it will provide a clear framework for compliance with aspects of the law which are already well understood and largely unchanged (e.g. the prohibition of genuinely unexpected and untrialled mandatory charges added on at the end of a purchasing journey); and
  • for those aspects of the drip pricing guidance that have created more uncertainty (including how the rules apply in the context of fixed-term periodic contracts), the CMA will run a further consultation on revised draft guidance in the summer, with a view to producing finalised guidance in this area in the autumn.

That said, the CMA are clear that in the meantime, they will be taking enforcement action against drip pricing which clearly breaches the rules in line with the April guidance. Therefore, for clear breaches of the DMCCA (and, likely, anything which would breach the current law), we consider that there is a possibility that regulators will take action without waiting for the publication of further guidance. You should, therefore, take action on drip pricing concerns now and refine the approach as guidance is published, rather than waiting for the guidance.

What changes are in store for savings schemes?

Now that we know what to be aware of for April 2025, let's turn our attention to post April 2025.

The DMCCA also introduces new requirements for consumer saving schemes and these will come into force on 1 January 2026. 

These schemes are those where the business has entered into a contract where a customer makes payments to a trader which are held in an account for the customer. The customer is then able to redeem the credit for goods, services, etc. provided the contract (either through its terms or is marketed/advertised in such a way) that the customer is restricted or incentivised to only redeem their funds during certain periods. For example, Christmas savings clubs.

The DMCCA has introduced new requirements for these kinds of schemes, for example, (a) requiring payments to be protected via trust arrangements or insurance and (b) introducing information requirements. Businesses will be specifically required to provide their customers, within 30 days of the first payment made, with the following:

  • The name, address, telephone number and email address of the insurer (or trustee) responsible for the consumer's assets;
  • Where insurance arrangements are in place, the policy number for the policy under which the consumer’s payments are protected;
  • Where trust arrangements are in place, a copy of the trust deed under which the consumer’s payments are held.

Businesses should be considering the extent to which they offer these schemes and setting up processes to ensure the requirements are met.

How will it change subscription contracts?

Last but not least, from a consumer law perspective, the DMCCA introduces some changes to subscription contracts. The timetable for these aspects is still not clear but is not expected before Spring 2026.

Subscription contracts include those which e.g. offer services at a reduced rate, or as a free trial, for an initial period, then automatically renew on less favourable terms.

These contracts are not in themselves problematic, but they can be seen as "subscription traps" where the terms are unclear (and therefore the consumer does not know what they are getting into), or they are difficult to terminate.

While there are certain exceptions (e.g. gas, heating and water suppliers, certain healthcare and medical contracts (amongst others)), the new rules will require businesses to provide:

  • pre-contract information;
  • cooling off periods which run from the day the consumer receives their service/product to 15 days after;
  • reminder notices – both before their trial ends and every 6 months thereafter; and
  • an easy and straightforward way to terminate.

It is likely that these rules will necessitate structural changes in the way many businesses offer subscription contracts. Therefore, businesses would be wise to consider their contracts and processes now rather than wait until later.

If you have any questions relating to the DMCCA please do contact Dan Smith, Zoe Pearman or any member of the team.