Consumer regulator given 10% fining powers under new consumer law Bill

England and Wales

10% fining powers confirmed in newly unveiled consumer law Bill:

Highly-anticipated proposals for new consumer laws have today (25 April 2023) been published in the Digital Markets, Competition and Consumers Bill (the “Bill”).

The Bill propels the UK’s consumer regulator, the Competition and Markets Authority (“CMA”), from having no right to fine for consumer law breaches into having the most aggressive fining regime in any country we know, with penalty fines linked to a business’ annual global, rather than UK-specific, turnover.  The proposals show that the Government is serious about giving the UK’s consumer regulator not just new powers, but tough 10% of global turnover sanctions.


The Bill was announced in the Queen’s Speech on 10 May 2022 and confirmed in the Government’s Autumn Statement in November 2022. The new consumer law proposals in the Bill include the major points we are expecting based on the Government’s proposals in April 2022 (as a response to a July 2021 consultation), but the Bill adds some new items and includes a much deeper level of granularity than we had anticipated based on the Government’s proposals.  There are over 100 pages of new consumer protection legislation covering enforcement (including direct enforcement powers for the CMA), protections from unfair trading, subscription contracts, consumer savings schemes, and alternative dispute resolution for consumer contract disputes.

In addition to the consumer law reforms, there are significant changes relating to the regulation of digital markets and from a competition law perspective, which we will update on separately. 

Overview of key consumer changes covered by the Bill:

If enacted, the Bill will drastically change the consumer law landscape in the UK, in particular regarding:

  • Enforcement – 10% fines. The CMA will be empowered to fine businesses directly up to 10% of their global annual turnover for infringements of certain consumer protection laws.  There are also penalty fines (which are linked to annual global turnover) for failure to comply with information notices, for breaches of any undertakings given by an enforcement subject, or for a breach of any direction imposed by the CMA. More clarity about the CMA’s ability to impose fines will come in the form of a statement of policy that the Bill requires the CMA to prepare and publish.
  • Enforcement – compensation direct to consumers. The CMA will be able to direct businesses to take enhanced consumer measures as the CMA considers is just and reasonable (without having to go to Court), which could include businesses having to compensate consumers directly.
  • Subscriptions. The reforms in the Bill in relation to subscription contracts reflect the massive growth in the subscription economy over the last decade, a feature of the continuing development of the digital economy that we will be exploring in the Subscription Economy topic as part of our Bandwidth Campaign. The Bill proposes more requirements for subscription contracts than what was set out in the Government’s April 2022 proposals, including the following requirements:
  • Replacement of current requirements: Currently, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“Regulations”) require certain information to be provided before a consumer enters into a contract (including a subscription contract) and give the consumer a right to withdraw from contracts in some circumstances. The Bill proposes that these Regulations will no longer apply to subscription contracts when the new law comes into force, which will help reduce the compliance burden for businesses, and instead subscription contracts will be governed by the new law (including as described below).
  • New information requirements: Subscription businesses will need to give clearer information to consumers before they enter into a subscription contract. Lots of information needs to be provided, and there are particular requirements about how it is provided. Some of the information must be given as part of the sign-up process rather than simply being made available (for example, using links). One particular requirement worth mentioning is that businesses will be required, as part of the final step which the consumer takes to enter into a subscription contract, to ensure that the consumer expressly acknowledges that the contract imposes an obligation on the consumer to make payments. If the Bill is passed, subscription businesses will need to revisit their sign-up processes, potentially making technical changes, to ensure that all the necessary information is provided in the correct manner.
  • Reminder notices: Subscription businesses will need to send reminders to consumers in certain situations, including before the first renewal payment and in respect of certain subsequent renewal payments. Reminders must include certain information and be sent at certain times.
  • Cancellation: The Bill includes various changes in relation to cancellation, including:
    • requirements designed to ensure that consumers can cancel subscriptions more easily. For example, subscription businesses will need to ensure that consumers can bring a subscription contract to an end in a single communication and without having to take any steps which are not reasonably necessary.
    • subscription businesses will need to give the consumer a notice acknowledging that the contract is at an end, and refund any overpayment by the consumer.
  • Implied terms: A trader’s compliance with certain duties (for example, to provide the required information about the subscription) will be an implied term in every subscription contract. Breach of those implied terms will entitle the consumer to cancel, and may entitle the consumer to a refund.
  • Cooling-off periods: The Bill proposes that consumers will benefit from new cooling-off periods whereby they can cancel the contract and potentially get a refund. There will be an initial cooling-off period when the contract begins, followed by another cooling-off period in certain situations only, namely when the contract first renews after an initial concessionary period (for example, a free trial or introductory offer period) and for subscriptions which renew every 12 or more months. Cooling-off notices will need to be sent, with certain information included.
  • Future changes. The Secretary of State will have various powers to amend the requirements in relation to subscription contracts, including by amending, removing or adding to the list of required information, and extending the cooling-off periods. There are some safeguards in respect to some of these powers (for example, consultation would be required before extending the cooling-off periods), but not all, with the Government generally having greater flexibility to amend the law without going through the usual Parliamentary process.

These new compliance requirements may create significant technological and operational expense for businesses, given that current market practice does not align with all of these requirements (although several of the changes are aligned with existing consumer law principles, regulatory guidance and enforcement action). During a cost-of-living crisis where it has been reported that many cash-conscious consumers are turning to TV subscriptions whilst they cut back on evenings out, the new obligations may well make it more costly for certain subscription businesses to continue to serve their consumers, with such costs ultimately passed through to consumers.

  • Unfair commercial practices. The Bill prohibits unfair commercial practices, including by setting out a list of commercial practices which are in all circumstances considered unfair at Schedule 18. The Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”) will be revoked. These changes were not anticipated, and we continue to review the detail to assess to what extent the provisions in the Bill materially differ from the CPRs. We suspect the inclusion of provisions on unfair commercial practices is designed to ensure that the law in this area is not affected by The Retained EU Law (Revocation and Reform) Bill 2022 which may otherwise have led to the sunsetting of the CPRs.
  • New unfair commercial practices. The Bill enables the Government to amend an existing list of automatically unfair practices (previously in the CPRs, and now at Schedule 18 of the Bill).  This creates an open door for the Government to change which commercial practices are in all circumstances considered unfair more readily.  In line with the Government’s April 2022 proposals and its press release launching the Bill, the Government may use this power to consult on adding the following new unfair commercial practices aimed at deterring, and facilitating enforcement against, traders who engage in them:
    • commissioning individuals to write and/or submit a fake consumer review;
    • posting consumer reviews without taking reasonable steps to check they are genuine; and
    • offering or advertising to submit, commission or facilitate fake reviews.
  • Consumer prepayment / saving scheme protections. The Bill requires that traders which run saving schemes (such as Christmas savings clubs), allowing consumers to prepay/save throughout the year, must safeguard consumers’ money through insurance or trust arrangements.

We will explore some of these new consumer law proposals further in separate articles in the coming days and weeks.


The fining powers granted to the CMA under the Bill are much more aggressive than the fining powers afforded to equivalent regulators in other countries internationally.  Previously it was up to the Courts to decide whether a UK business had breached UK consumer law and impose sanctions for alleged non-compliance, although in practice fines for breach of consumer law are rarely imposed on larger companies.

Under the new enforcement regime, the CMA will be able to decide for itself if there has been a breach of consumer law, and impose a potentially very significant GDPR-style fine on a business, without the comfort of prior consideration by the Courts.  The CMA will also be able to require that businesses award consumers with compensation where it would be just and reasonable.

The new regime could lead to quicker enforcement action, with the impact of fines at the maximum level being potentially devastating for infringing businesses. To-date, the CMA’s line has always been that it remains for a court to decide whether or not consumer law has been breached. With the new proposed powers, court determination may well become irrelevant for many businesses as the threat of fines, and/or compensation schemes, may leave little option but to toe the line. It remains to be seen whether these powers will actually be sufficient on their own to deter non-compliance and bolster consumer protection, at least in the short-term, given that the CMA does not have endless resources to take enforcement action.

We also anticipate that compliance with new requirements in the Bill, particularly in relation to subscription contracts, will involve significant resource for many businesses.

It will be interesting to see how the Bill progresses through further readings and other parliamentary stages where it will be discussed, debated and considered in detail, before it can be passed by both the House of Commons and the House of Lords, given Royal Assent and become law.  Amendments can be expected – by way of example, there is currently no requirement for businesses to give consumers the choice of whether they want an auto-renewing subscription or not on sign-up. Yet, with the Labour Party recently announcing this as a policy they are pursuing, this measure and other consumer protections cannot be ruled out.

Whilst it is dependent on the amount of debate and scrutiny it receives in Parliament, this Bill may become a priority for Rishi Sunak’s Government, with some commentators suggesting that it could become law later this year.

If you would like to discuss a consumer law issue or the Bill, please do not hesitate to contact one of our specialists.