New consumer protection rules on unfair commercial practices under the Digital Markets, Competition and Consumers Act (the "DMCCA") came into force on 6 April 2025. This blog explores the new powers of the Competition and Markets Authority ("CMA") to enforce these rules and summarises the steps that organisations should be taking to ensure that their commercial practices comply.
Direct Enforcement Powers for the CMA
Under the previous rules, the CMA was required to apply to the court where it suspected an infringement of consumer protection law.
Under the new regime, the CMA may enforce consumer protection laws directly against a person or organisation without seeking permission from the court. The CMA is now empowered to conduct its own investigations, agree undertakings or settlements, and impose penalties. The new powers will make it much easier for the CMA to take action against organisations it considers are not complying with rules on unfair commercial practices.
Where the CMA reasonably suspects that a person has engaged, is engaging, or is likely to engage in a commercial practice which constitutes an infringement, or is an accessory to such a practice, it may conduct an investigation without seeking permission from the court. As part of its investigatory role, the CMA can issue a Provisional Enforcement Notice (“PIN”) to the suspected party who will be given the opportunity to respond. During this phase, the CMA will conduct its own investigation into the supposed infringement, including liaising with third parties.
Following an investigation which reveals that the suspected party is involved in infringing behaviour, the CMA will issue a Final Infringement Notice (“FIN”), which may include requirements to pay a monetary penalty or undertake compliance with CMA directions. Once a FIN has been issued, an infringing party may agree to a settlement where they admit their wrongdoing and comply with the requirements specified by the CMA.
As an alternative to a FIN, the CMA may instead accept an undertaking offered by the suspected party to satisfy the CMA’s concerns in respect of the infringing behaviour. This may involve removing content, amending policies or any other action considered necessary to rectify the infringement.
With the new regime comes new powers for the CMA to impose penalties on those engaging in infringing behaviour. The CMA is now empowered to issue financial penalties of up to £300,000 (or 10% of the business’ global annual turnover, if higher) within a FIN, or where a party fails to comply with the terms of a FIN or undertaking.
CMA guidance
In addition to new powers for the CMA, the DMCCA also introduces a new test for unfair commercial practices which assesses whether the practice is likely to cause a consumer to take a different transactional decision.
The DMCCA also introduces new rules on preventing fake consumer reviews and drip pricing.
You can read more about the new rules in this update.
To help organisations prepare for the new regime and understand the CMA’s approach to interpreting the new rules on unfair commercial practices in the DMCCA, the CMA has published detailed guidance.
This guidance provides examples of outright banned practices and explains 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.
You can access the CMA’s guidance on the CMA website.
The CMA’s guidance does not cover the new rules in the DMCCA on subscription contracts, which are expected to come into force in Spring 2026. You can read more about the new rules on subscription contracts in this update.
Updates to the CAP Code and BCAP Code
In addition to the CMA guidance, the Advertising Standards Authority has also updated the CAP Code (for 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 have been updated to ensure that the ASA’s regulation of adverts and promotions aligns with the new rules on unfair and misleading claims in the DMCCCA.
The CMA’s approach to enforcing the DMCCA
The CMA will adopt a phased approach to enforcement during the early stages of the DMCCA's enforcement. In recent guidance, the CMA stated that for the first 12 months of the DMCCA's new provisions (until April 2026), it will focus on behaviour which most clearly infringes the law and harms consumers. This includes taking action against:
- aggressive sales practices that prey on consumers in vulnerable positions;
- fees that are hidden until late in the buying process;
- information being given to consumers that is objectively false;
- unfair and unbalanced contract terms; and
- behaviour where the CMA has already put down a clear marker through its previous enforcement work.
As discussed in our previous blog, the DMCCA includes a new prohibition on fake reviews. For the first 3 months, (until July 2025), the CMA will focus on facilitating compliance rather than taking enforcement action against businesses engaging in this behaviour.
Whilst the infringing conduct must take place after 7 April 2025 in order for the CMA to impose a penalty, it may take into account the organisation’s previous behaviour in determining the appropriate level of penalty. This may include factors such as taking proactive steps to correct infringing conduct, or failing to comply with a previous enforcement order issued under the old regime.
Preparing for the DMCCA
The CMA’s enhanced role highlights the growing scrutiny on businesses’ compliance with consumer protection laws. Given the CMA's new powers, businesses should make sure that they are ready for the new rules.
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; and
- 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; and
- 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.
We have extensive experience advising clients on advertising requirements and compliance with the new DMCCA regime. Should you wish to discuss anything raised in this blog, please contact one of our commercial lawyers.
