Are you ready for the DMCC Act and reform of UK consumer protection laws?

The Digital Markets, Competition and Consumers Act 2024 (DMCCA) makes significant changes to UK consumer protection law, including updates to rules on unfair commercial practices, new laws on subscription contracts and new enforcement powers for the Competition and Markets Authority. These changes are expected to start coming into force in April 2025 and will affect most businesses providing goods and services to consumers. In this blog post we provide an update on implementation and what businesses need to do to get ready.

Key Provisions and Implementation Timeline

The main changes to consumer protection law are set out in Parts 3 and 4 of the DMCCA and are expected to come into force in April 2025 and Spring 2026:

In this update, we are focussing on the implementation of changes to the rules on unfair commercial practices and the CMA's new enforcement powers, and the new subscription contracts regime. For more background, read our overview of the consumer protection aspects of the DMCCA.

Unfair Commercial Practices

Part 3 of the DMCCA grants the Competition and Markets Authority  new enforcement powers. This includes the power to decide if a commercial practice is unfair. 

Part 4 of the DMCCA consolidates and updates existing rules on unfair commercial practices, including new rules on preventing fake consumer reviews and drip pricing. 

The rules comprise practices that are prohibited regardless of their impact on the consumer's behaviour and those that are unfair if they are likely to cause consumers to take a different transactional decision. The different transactional decision test is new under the DMCCA and replaces the previous test of distorting the economic behaviour of consumers.

In advance of those new rules coming into force, the CMA has carried out a consultation on its proposed guidance. 

Given the CMA's new enforcement powers and ability to determine what is unfair, this guidance will be crucial in helping businesses to understand how the CMA will interpret the new rules and enforce the law. 

The draft guidance provides examples of outright banned practices and explain how to assess:

• unfairness (including a flowchart to help determine unfairness)
• misleading actions 
• misleading omissions and
• aggressive practices. 

For example, in relation to drip pricing,  businesses must provide consumers up front with "the total price of the product" including "any fees, taxes, charges or other payments that the consumer will necessarily incur if the consumer purchases the product."

The draft guidance explains that if a gym membership is subject to a minimum contract term of six months, then the advertised price must set out the total cost over the six months, not just the monthly fee.

In relation to the obligation to take steps to prevent fake consumer reviews, the guidance explains what will constitute a fake review and when businesses can incentivise consumers to leave reviews. It also sets out what steps the CMA expects businesses to take to detect and act on fake reviews, including the requirement to develop a fake reviews prevention and removal policy.

The CMA will be publishing its finalised guidance in advance of the new rules and powers coming into effect in April 2025. In the meantime, you can review the CMA's draft guidance on the CMA website.

Subscription Contracts

The DMCCA introduces new rules in relation to subscription contracts. These rules are intended to address so-called "subscription traps" where it is difficult for the consumer to exit the contract and avoid a renewal. 

The rules don't just to subscriptions for software and digital content. They will apply to recurring or indefinite consumer contracts for any goods and services unless they are expressly excluded from the scope of the new rules. 

For more background, read our summary of the new rules on subscription contracts.

Under the DMCCA, a number of areas are left to secondary legislation to set out the detail. The Government recently undertook a consultation and call for views on its proposed approach to regulations including: 

• cooling-off cancellation rights, returns and refunds including the consequences of cancellation, the waiving of cooling off rights and termination of ancillary contracts
• cancellation rights for breaches of duties
• timing of repayments of refunds
• contractual terms for exiting a contract
• arrangements for exiting a contract and ensuring consumers do not face barriers in exercising their rights
• information notices, including reminder notices, end of contract notices and renewal cooling-off notices and 
• Key pre-contract and full pre-contract information. 

The consultation responses will help to shape the secondary legislation that the Government will publish over the coming months in advance of the new rules coming into force in Spring 2026.

In the meantime, you can see the Government's proposals in Consultation on the implementation of the new subscription contracts regime.

Advertising Standards Authority (ASA) Consultation

The ASA is also proposing updates to the CAP Code (for the non-broadcast ads, sales promotions, and direct marketing) and the BCAP Code (for adverts and programme sponsorship on TV and radio services licensed by OFCOM).  The CAP Code and BCAP Code apply to advertisers, agencies and media owners.

The current versions of the CAP Code and BCAP Code borrow heavily from the current regulations on terminology and approach to unfair and misleading claims. 

These updates aim to align with new rules on unfair commercial practices, including updated tests for misleading marketing communications and new rules on fake consumer reviews and omission of material information, ensuring that the CAP Code and BCAP Code and the ASA's approach to regulation mirrors the new rules in the DMCCA.

The ASA's consultation closed on 5 February 2025. You can review the ASA's proposed amendments on the ASA website.

Preparing for the DMCCA

Businesses should make sure that they are ready for the new rules coming into force. Preparation is likely to require detailed reviews of existing commercial practices and, for those businesses that provide goods or services on a subscription basis, extensive changes to websites, apps and IT systems.

In relation to unfair commercial practices,  businesses should:

• Review their commercial practices to ensure that they comply with the new rules and CMA guidance
• Ensure that they are not using drip-pricing or omitting key pricing information such as mandatory charges
• Implement processes for preventing fake reviews and ensure that any use of incentives to encourage consumers to leave reviews complies with CMA guidance
• Publish their fake reviews prevention and removal policy

In relation to the new subscription contracts regime, businesses should:

• Identify what goods and services they sell which may be subject to the new rules
• Review their customer sales journeys to carry out an initial compliance review
• Review sales and CRM platforms and other IT systems to work out what technical changes need to be made to processes and systems to ensure that they comply and provide consumers with the correct information at point of sale and renewal

If you would like to discuss the new consumer protection rules under the DMCCA and how your business can prepare, please contact Martin Sloan or your usual Brodies contact.