The DMCC Act: Consumer elements come into force from 6 April 2025

After much anticipation, it is now confirmed that next month the landmark consumer law provisions of the Digital Markets, Competition and Consumers Act (“DMCC Act”) will come into force, following the enactment of the Digital Markets, Competition and Consumers Act 2024 (Commencement No. 2) Regulations 2025 (SI 2025/272) ( “Regulations”).

What provisions are coming into force?

Unfair commercial practices regime: out with the old, in with the new?

The DMCC Act will replace the current legislation in relation to unfair commercial practices, the Consumer Protection from Unfair Trading Regulations.^[1] The DMCC Act largely reproduces the effect of the previous regulations, though there are some material changes taking effect from 6 April including:

• Fake reviews: Consumer reviews which are not based on a person’s genuine experience (but purport to be) will be prohibited. This is now one of the banned commercial practices which is deemed to be unfair in all circumstances i.e. no evidence of its effect (or likely effect) on the average consumer is required for it to be considered unfair. The banned practice extends to commissioning others to write or submit fake reviews (for example, asking a content creator to post a video of a fake review on social media in return for ‘freebies’) and offering services for, or the facilitation of, the submission, commission or publication of fake reviews. It also includes a positive obligation on any ‘publisher’ of reviews to take reasonable and proportionate steps to prevent and remove fake reviews.
• Drip pricing: This bans the practice of showing consumers an initial headline price for a good or service and then introducing additional mandatory charges as the consumer proceeds with the transaction. Mandatory charges (such as booking fees, delivery charges, local taxes and joining fees) must be included in the initial headline price. 
• Vulnerable persons: The DMCC Act extends the concept of vulnerability to include a consumer’s circumstances. The CMA have provided a non-exhaustive list of what this may include such as divorce, mourning, and recent unemployment.

Consumer law enforcement regime

From 6 April, the CMA will be able to directly investigate and enforce consumer laws, including the new power to impose fines of up to 10% of global turnover for breach of consumer protection laws. The CMA has responded to feedback following the recent consultation on the CMA’s draft guidance on unfair commercial practices and have acknowledged that: (i) clearer additional guidance is required to help businesses meet their compliance burden; and (ii) the compliance burden must be proportionate, especially for smaller businesses.   

Early enforcement by the CMA: carrot or stick?

“…our early enforcement action is likely to focus on the most egregious breaches…”

A recent speech given by the Chief Executive of the CMA, Sarah Cardell, sheds further light on the CMA’s approach to early enforcement. The CMA has recognised that some of the draft guidance to date (especially in relation to drip pricing) has been unclear and that it will take time for businesses to implement changes to comply with the new regime. The CMA’s initial focus will therefore be on helping businesses to comply with the regime, rather than on enforcement. This will include:

• Publishing a series of ‘interactive business explainers’ for the key practices covered by the guidance;
• Implementing a three-month ‘grace period’ in respect of fake reviews during which the CMA will focus on helping businesses to meet requirements, rather than on enforcement; and
• Taking a phased approach to guidance on drip pricing, with a further consultation on more uncertain aspects (including in relation to fixed term periodic contracts) in the summer.

Given this, the CMA’s early enforcement action will focus on collaboration rather than enforcement – which is good news for businesses. There will, however, not be a blanket immunity during this initial period and the CMA has said that it will take enforcement action against more egregious breaches, including against any aggressive sales practices that prey on vulnerability.   

We have included a roadmap below which sets out the CMA’s plans for further guidance and their approach to enforcement during this time, as well as other key dates around the commencement of the DMCC Act. 

What can businesses do to prepare?

Whilst the CMA appear to be allowing businesses some breathing room to adjust to the changes brought about by the DMCC Act, it is important that consumer-facing businesses are alive to the changes being made and are taking proactive steps towards compliance.

• Read the CMA’s draft guidance on unfair commercial practices.
  • If your business uses any form of review (including written blogs, comments under product listings on a website, star ratings and in printed adverts), you should familiarise yourself with the CMA’s draft guidance at Annex B.
  • If your business ‘publishes’ reviews, including as an intermediary such as an online marketplace, consider the general steps set out by the CMA to comply with your positive obligation. This may include (i) preparing a policy on the business’ approach to fake reviews and (ii) implementing or enhancing a system to detect, investigate and act in response to fake reviews.
• Contribute to the CMA’s upcoming consultation on aspects of the drip pricing guidance (anticipated to be in summer of this year).
• Monitor any further guidance published by the CMA, including the final guidance on unfair commercial practices in April, and the finalised guidance on drip pricing expected in autumn of this year.

We will be publishing a series of articles in the lead up to 6 April giving further information on the key changes coming into force and providing practical steps on how businesses can comply with the new regime.

For further information on this or any consumer law issue, please do not hesitate to contact one of our specialists. Our previous articles on the DMCC Act’s impact on consumer law can be found here, with further information on the digital markets and competition law aspects here.
 

^[1] Consumers’ individual rights of redress will continue to be governed by the previous regulations until further secondary legislation has been made.