With just over two weeks to go until most of the Digital Markets Competition and Consumers Act 2024’s (DMCCA) consumer protection provisions come into force, the UK’s Competition and Markets Authority (CMA) has announced its enforcement priorities and the timeline for the release of new guidance for businesses preparing themselves for changes under the new regime.
The CMA’s enforcement priorities
From 6 April 2025, the CMA will be able to take action directly against businesses which it thinks have breached consumer protection laws and impose significant fines (up to 10% global turnover) without having to go to court. Tougher requirements for businesses in terms of how they interact with consumers – including in relation to fake and misleading reviews for products and services, and how they run pricing promotions (see below) – come into force on the same date.
Given the scope of these changes, the fact that the CMA has now given a steer (in a blog, here) on how it will seek to enforce these rules in the opening months of the new regime is welcome. The CMA has said that it will initially focus on practices which it considers to be “most egregious” in terms of the harm they do to consumers, such as:
- Aggressive sales practices that prey on vulnerability
- Providing objectively false information to consumers
- Contract terms that are very obviously imbalanced/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”
The CMA’s reference to conduct which has been the subject of previous enforcement work suggests that businesses which have previously been the subject of consumer protection enforcement action, or which operate in sectors where the CMA has identified consumer protection breaches in the past, may be at particular risk. Likewise, businesses which engage in the “always unfair” practices listed in Schedule 20 to the DMCCA – which include a diverse range of prohibited practices, from falsely stating that a product will only be available for a limited time to prompt the consumer to make a decision to using editorial content that has been paid for without making this clear – may be in the firing line.
The CMA’s announcement follows the draft strategic steer given by the Government to the CMA in February, which outlined its expectation that “the CMA support and contribute to the overriding national priority of this government – economic growth.” In a recent speech, Sarah Cardell, the CMA’s CEO, said that tackling poor B2C practices could serve that growth agenda. The CMA, she said, would use its “new direct consumer protection powers […] to help grow the economy through promoting consumer trust and confidence, while deterring poor corporate practices”.
Initial enforcement of new rules concerning drip pricing and fake reviews
Two of the main practices that are prohibited by the DMCCA concern drip pricing (which the CMA describes as “the prohibition of genuinely unexpected and untrailed mandatory charges added on at the end of a purchasing journey”) and fake and misleading reviews (prohibitions on submitting, publishing and “facilitating” the procurement of fake or misleading reviews, concealed incentivised reviews and misleading consumer review information).
The CMA seems likely to allow many businesses a short period of time to prepare for these new rules.
On the drip pricing ban, the CMA announced in its blog that it would run an additional consultation this summer relating to areas of its guidance that have “created more uncertainty” (including fixed-term periodic contracts) and before then “will only take enforcement action against drip pricing which clearly breaches the rules”.
On fake reviews, the blog acknowledges that businesses need time to implement changes to their compliance regimes in light of the DMCCA’s new prohibitions on fake and misleading reviews and misleading consumer review information and therefore announces that, during the first three months of the regime, the CMA “will focus on supporting businesses with their compliance efforts rather than enforcement.”
Further guidance on the new consumer law and enforcement regime
In the blog, the CMA also provided further information on when important guidance documents on the new regime would be published.
The CMA states in its blog that this guidance will be available before 6 April and will comprise:
- Updated unfair commercial practices guidance, which will “[set] out detail on what practices are and aren’t compliant with the law”
- Updated guidance on the CMA’s direct enforcement model, which will outline “how a direct enforcement action will run from start to finish”
- Updated consumer protection enforcement guidance, which will “[set] out how the regime sits in the broader landscape and when [the CMA] will exercise its direct enforcement powers”
The CMA has also said that it will publish a further document setting out how its so-called 4Ps’ framework (an emphasis on pace, predictability, proportionality and process announced by the CMA on 21 November 2024, see here) will apply to consumer protection cases.
