The introduction of the Digital Markets, Competition and Consumers Act 2024
The Digital Markets, Competition and Consumers Act 2024 (The “Act”) has now come into force as of 6 April 2025, after being enacted on 24 May 2024. The Act builds upon existing consumer protection laws, like the Consumer Protection Act 2000, by strengthening enforcement and introducing new consumer rights, particularly in the digital space.
The Act marks a substantial enhancement for consumer protection in specific regard to the enforcement powers granted to the Competition and Markets Authority (“CMA”). The Act expands the CMA’s powers to enforce consumer law directly, including the ability to impose significant fines, and introduces new regulations on areas like fake reviews, drip pricing, and subscription traps.
In a joint statement by the CMA and the UK government, Sarah Cardell, Chief Executive of the CMA, stated the following:
“Consumers deserve to know that the CMA has their back; and fair-dealing businesses looking to grow and invest deserve to know that their competitors are playing by the same rules. We will use the new regime to strengthen the trust and confidence of consumers and businesses – supporting economic growth and incentivising good corporate practice”.
Commercial Practices
The Act repeals and reinstates the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (CPRs). The Act amends and supplements the list of commercial practices that are always considered unfair to reflect the fact that consumers and traders increasingly interact online.
The Act lists 32 banned commercial practices, which include:
- Falsely stating that a product will only be available for a limited time, or that it will only be available on particular terms for a limited time, in order to elicit an immediate decision and deprive consumers of sufficient opportunity or time to make an informed choice;
- Stating or otherwise creating the impression that a product can be legally sold when it cannot (e.g. sellers operating on a large online marketplace offer so called ‘zombie knives’ for sale to consumers. The sale of such knives is illegal in the UK);
- Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (e.g. an online influencer is gifted a free holiday with the expectation they will post content about it on their social media account. Their content does not make it clear that this is a paid-for feature – for example by clearly labelling it #Ad);
- Submitting a fake review, or commissioning or incentivising any person to write and/or submit a fake review of products or traders; misrepresenting reviews, or publishing or providing access to reviews for products and/or traders without:
- taking reasonable and proportionate steps to remove and prevent consumers from encountering fake reviews; and
- taking reasonable and proportionate steps to prevent any other information presented on the platform that is determined or influenced by reviews from being false or in any way capable of misleading consumers.
- Claiming that the trader is about to cease trading or move premises when the trader is not (e.g. a trader runs a clothes shop. They put up a sign in the shop window stating: ‘Closing down sale’ when the shop is not actually closing down).
- Preventing price dropping practices. Drip pricing is where only part of an item’s price is shown during the early part of the consumer journey, and the total amount to be paid is revealed at or near the end of the buying process, by which time the consumer may feel committed to the purchase.
The Secretary of State has the power to add to the current list of automatically unfair practices using secondary legislation. This aims to allow consumer laws to adapt more quickly than has been possible under previous legislation to changes in the market, consumer practices, and technology.
Subscription Contracts
These types of contracts have become increasingly more popular with consumers, but regulation has been limited to the general requirements of the Consumer Rights Act 2015 which were not ideal.
The Act now includes the following obligations for subscription contract providers:
- Enhanced pre-contract information requirements;
- Sending reminders to consumers before a contract rolls over (or auto-renews) onto a new term;
- A requirement to remind consumers that a free trial or low-cost introductory offer is coming to an end;
- Consumers must have an ability to exit a contract in a straightforward and timely way.
Enforcement and Penalties
Under the Act, the CMA can pursue the following enforcements options:
- Impose civil sanctions, including monetary penalties without first requiring a court order;
- Use written information notices to require a party to provide information during a CMA investigation and impose penalties on those who do not comply with such notice; and
- Give a provisional notice to a party where it has reasonable grounds to believe that the party has failed to comply with the Act or orders of the CMA.
Under the Act both the CMA and the court, have the power to impose financial penalties of up to 10% of global turnover and, where a business fails to comply with commitments made to the CMA, it could be subject to penalties of up to 5% of global turnover, with further daily fines applied for continued non-compliance.
In cases where a company fails to supply requested information without valid justification, deliberately withholds evidence or provides false or misleading data, the CMA may issue fines of up to 1% of global turnover, alongside additional daily penalties for ongoing failure to comply.
Individuals may also be fined as part of this new regime.
Conclusion
With the introduction of the Act, the UK has taken a significant step in strengthening consumer protections and enhancing regulatory enforcement. The new powers granted to the CMA offer a more streamlined and proactive approach to tackling unfair practices in digital markets.
Businesses will need to adapt to these changes. Compliance with the new rules will be critical to avoid penalties.
For further information and guidance, please contact Amy Peacey in our commercial team.
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