The Times They Are a-Changin’: Major changes to UK consumer law are coming!

As Bob Dylan famously sang, "The times they are a-changin’." While Dylan’s words were a rallying cry for cultural and societal shifts, they also resonate with the evolving landscape of UK consumer law today.  

The Digital Markets, Competition and Consumers Act 2024 (DMCCA) embodies this change, ushering in a new era of oversight designed to encourage fair competition, protect consumers, and address the growing dominance of digital platforms. 

Businesses will need to adapt swiftly to this new regulatory environment or risk severe financial and reputational consequences.

In this article, David Wozniak outlines the key changes introduced by DMCCA and the risks businesses face if they fail to comply with them.

Key changes to consumer law under the DMCCA

The DMCCA introduces the following changes to UK consumer law, which are scheduled to be implemented by April 2025:

1. More severe enforcement powers for the Competition and Markets Authority (CMA)

Under the DMCCA, CMA will be granted the authority to impose substantial fines up to 10% of global annual turnover on businesses found to have infringed consumer law.  

This is massive as it introduces swifter and more impactful enforcement action. Keep reading!

2. A crackdown on misleading practices

• Fake reviews
  
  Businesses are prohibited from hosting or displaying consumer reviews without taking “reasonable and proportionate steps” to verify their authenticity.
  
  Additionally, the commissioning or facilitating of fake reviews is explicitly banned.
  
  
• Drip pricing and other misleading pricing practices
  
  The DMCCA aims to crack down on misleading pricing practices, such as “drip pricing”, where additional charges are added to the advertised price of a product or service at a later stage during the purchasing process.  

3. Regulation of subscription contracts

businesses will be required to provide clear information about subscription terms, facilitate easy cancellations, and send reminders before auto-renewals of product subscriptions and allow “cooling off” periods.

These measures aim to prevent consumers from being trapped in unwanted subscriptions. Whilst these provisions are not expected to come into straightaway (with their implementation being scheduled for 2026), they may require significant changes to internal processes and IT systems of businesses to ensure compliance when they come into force.

The price for non-compliance

Businesses will face severe consequences for infringing consumer law, following the introduction of the DMCCA.

Not only will their reputations be on the line, but they will also face a much higher risk of a substantial financial hit from serious non-compliance.  

1. Monetary fines

The Act empowers the CMA to impose fines of up to 10% of a company’s global annual turnover. This is higher than in most EU countries.  

In certain circumstances, the DMCC Act will also give the CMA power to hold parent companies accountable for breaches of consumer law by their subsidiaries.

2. Redress orders

Under the Act, the CMA will also be able to impose "enhanced consumer measures", which may require businesses to compensate consumers who have suffered harm or allow early termination of contracts.

3. Private enforcement

In addition to remedies available under the Act, businesses face the risk of private claims from individuals.

In addition, there has been a rise in law firms specialising in bringing class actions on behalf of consumers who have been harmed by anti-competitive behaviour or unfair trading practices. The costs of litigation and potential settlements could be substantial to businesses in such cases.

Whilst the DMCCA doesn't change the substantive law here, it is likely to encourage claimant law firms to explore more opportunities to bring claims in this area. 

Why these changes matter

For businesses, it’s a reminder that staying competitive means not just innovating, but also complying with regulatory standards of fairness and accountability.

As Dylan might remind us, “You better start swimmin’ or you’ll sink like a stone.” The tides of change in UK consumer law are here, and they’re reshaping the regulatory landscape. It’s up to businesses to embrace these changes and move with the times.  

Stay tuned for more information on what your business can do to prepare for these imminent changes!  

For more information, please contact David Wozniak using [email protected] or 0191 211 7831.