The Digital Markets, Competition and Consumers Act (consumer aspects)

The Digital Markets, Competition and Consumers Act (DMCC) came into effect on 24 May 2024 and represents a major shift in UK digital, competition and consumer protection regulation.

From a consumer protection perspective, the key aims of the legislation are to provide increased protections for consumers against unfair or misleading business practices and significantly enhance the enforcement remit of the Competition and Markets Authority (CMA) – in particular, with respect to online activities.

Affected businesses

The consumer protection requirements of the DMCC apply to all businesses selling goods or services to consumers in the UK. By way of example, this includes:

• Retailers and service providers
• Business-to-consumer (B2C) ecommerce
• Online marketplaces
• Subscription services

Key impacts

The DMCC provides increased protections for consumers against unfair or misleading business practices, particularly in relation to the more pernicious behaviours which have emerged in UK ecommerce.

The key changes for businesses that engage with consumers include:

• Subscription traps – Stricter rules, including increased transparency requirements and enhanced rights for consumers, with respect to cancellation of subscription contracts
• Fake reviews – New rules aimed at preventing fake reviews, including putting in place systems and processes to identify, investigate, report, respond to and/or remove fake and/or misleading reviews
• Hidden fees – New requirements to display total costs upfront in adverts and online product listings in an effort to ban ‘drip pricing’ where extra fees appear late in the purchase process
• Stronger enforcement – Broader powers given to the CMA to investigate and fine businesses that break the rules

Enforcement

The DMCC empowers the CMA to directly enforce consumer protections through administrative proceedings, without having to go to court. For the first time ever, the CMA will have the power to:

• Issue direct infringement notices to businesses in suspected breach of consumer law.
• Impose fines of up to 10% of annual global turnover.
• Impose fines of up to 5% of annual global turnover for breaching undertakings.
• Impose fines of up to 1% of annual global turnover for procedural breaches, such as failing to comply with information notices.
• Imposes fines of up to £300,000 on individuals, who are an ‘accessory’ to substantive consumer law infringements by a company.

In addition, the DMCC empowers the courts to impose civil monetary penalties on businesses in breach, meaning designated enforcers –including the CMA and the Office of Communications (Ofcom) – will continue to be able to apply to the courts for a range of consumer protection orders and ask the courts to impose fines. Court-issued fines will mirror those that can be imposed directly by the CMA (as described above).

Key timings

The bulk of the provisions are now in force. To give businesses time to prepare, the government has announced that subscription trap obligations will not enter into force until 2026.

This content is provided for general informational purposes only, and your access or use of the content does not create an attorney-client relationship between you or your organization and Cooley LLP, Cooley (UK) LLP, or any other affiliated practice or entity (collectively referred to as “Cooley”). By accessing this content, you agree that the information provided does not constitute legal or other professional advice. This content is not a substitute for obtaining legal advice from a qualified attorney licensed in your jurisdiction, and you should not act or refrain from acting based on this content. This content may be changed without notice. It is not guaranteed to be complete, correct or up to date, and it may not reflect the most current legal developments. Prior results do not guarantee a similar outcome. Do not send any confidential information to Cooley, as we do not have any duty to keep any information you provide to us confidential. This content may have been generated with the assistance of artificial intelligence (AI) in accordance with our AI Principles, may be considered Attorney Advertising and is subject to our legal notices.