The travel sector is a major driver of the UK economy, given that holiday purchases are for many people their biggest single annual spend after their homes. The UK Competition and Markets Authority (“CMA”) has previously taken action to protect consumers in this sector and is likely to be continuing to do so.
On 6 April 2025, the key consumer protection aspects of the Digital Markets, Competition and Consumers Act 2024 (“DMCCA”) came into force. The new consumer protection regime under Parts 3 and 4 of the DMCCA updates and replaces the Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”) and provides the CMA with new direct enforcement powers, removing the CMA’s previous obligation to go to court to enforce consumer law.
These changes are relevant to travel sector businesses, including their advertising and sales strategies, practices in relation to reviews, and pricing, and given the CMA’s interest in this sector, businesses are advised to ensure compliance with the new rules.
We set out below some key features of the new consumer protection regime, explain why they matter to travel sector members, and our recommended next steps to secure business-readiness.
Key aspects of the new consumer protection regime
The new regime updates the list of banned unfair commercial practices and overhauls enforcement powers and procedures available to the CMA.
1. New unfair commercial practices regime
The DMCCA includes new rules which prohibit unfair commercial practices, and which (mostly) replace the Consumer Protection from Unfair Trading Regulations 2008 (“CPUT”). The DMCCA rules are broadly similar to the CPUT, but a number of changes have been made, including to make the DMCCA rules easier for regulators such as the CMA to enforce.
Among the key changes affecting the travel industry are:
- Drip pricing: drip pricing, which is the practice of displaying to purchasers an initial price for a product and later adding further mandatory fees as they proceed with their purchase, is prohibited under the DMCCA. The ‘total price’ must be given upfront in any invitation to purchase (such as an advert for a specific holiday or flight and which includes the price), which must include all fees, taxes, charges or other payments that the consumer will necessarily incur if the consumer purchases the product. If, owing to the nature of the product, the total price cannot reasonably be calculated in advance, consumers must still be given clear information as to how it will be calculated and this information must be displayed as prominently as the headline price. However, this exception only applies in cases where the nature of the product means that the total price of the product cannot be reasonably calculated in advance, and cannot be relied on in other cases. As a result of these changes, travel sector businesses will need to pay close attention to how they present headline prices. The CMA will have a much clearer basis on which to take enforcement action when a travel sector business excludes mandatory charges such as taxes and booking fees from the headline price and instead adds them on as the consumer moves through the purchase process.
- Fake reviews: the DMCCA includes several new prohibitions with regards to fake consumer reviews, including submitting, or commissioning another person to submit or write a fake consumer review, and publishing consumer reviews and consumer review information (such as star ratings for a hotel) without taking such reasonable and proportionate steps as are necessary for the purpose of preventing the publication of fake consumer reviews, consumer reviews that conceal the fact that they have been incentivised, and consumer review information that is false or misleading. For more details, see our article here. This is an area where the CMA has already taken enforcement action and is likely to continue doing so in the future. On 6 June, the CMA said that it would continue looking at the conduct of players across the review business sector, including businesses whose products and services are listed on review sites, to determine whether further CMA action is needed. Given the importance of reviews in the travel sector, businesses in the travel sector which show consumer reviews or consumer review information (for example, on their websites) are advised to carefully consider the new DMCCA provisions and related CMA guidance to ensure that their policies and practices in relation to reviews are compliant.
For more commentary on other aspects of the unfair commercial practices rules in the DMCCA, see our previous article here.
2. CMA’s new direct enforcement powers
Crucially, the CMA now has the power to determine whether businesses have breached key consumer protection laws and to take direct enforcement action against them. Therefore, whilst the CMA may still agree undertakings with businesses as per the previous regime, it will not be limited to having to apply to court for enforcement where businesses refuse to agree undertakings or where undertakings are breached. The CMA can sanction businesses in various ways, including by imposing fines of up to 10% of annual worldwide turnover. The CMA’s new powers give new teeth to the consumer protection regime, which previously saw limited actions owing to the fact that infringements needed to be proved in court which added time, cost and uncertainty to the enforcement process. The fact that the CMA can enforce directly under the DMCCA may, over time, lead to more enforcement, though the CMA has committed to pace and proportionality as being important factors in its enforcement, and the current Government’s focus on growth may limit the extent to which the CMA uses its new powers. It is important to note that the CMA does not intend to become the primary enforcer of consumer protection laws, but will continue working with existing bodies. For more information about the CMA’s new enforcement powers, see our article here.
The DMCCA also includes an enhanced court-based regime which enables designated enforcers (including the Consumers’ Association, Which?) to apply to court for enforcement orders, interim measures and financial penalties up to 10% of a company’s annual worldwide turnover.
The key powers granted to the CMA under the new enforcement regime include the ability to impose:
- Provisional and final infringement notices where the respondent has engaged in or is an accessory to a relevant consumer law infringement;
- Enhanced Consumer Measures which can require businesses to compensate consumers, improve compliance procedures or provide clearer market information to ensure consumers can make informed choices;
- Online Interface Notices to businesses operating websites, apps or other digital content promoting the sale of goods, services or digital content that may require the removal of certain content or the deletion of a domain name;
- Enforcement Notices in the event that undertakings sought by the CMA following an investigation are not complied with;
- Enforcement directions; and
- Information enforcement notices.
The CMA can now apply financial penalties of the greater of up to £300,000 or 10% of annual global turnover for breaches of consumer protection laws. A breach of an undertaking or failure to comply with a final breach of directions enforcement notice can result in a fine of up to £150,000 or 5% of annual global turnover, whichever is higher, plus an additional daily penalty if the breach persists thereafter of up to £15,000 or 5% daily global turnover, whichever is higher. Providing materially false or misleading information may also lead to a fine of up to £30,000 or 1% of annual global turnover, whichever is higher.
What this means for the travel sector
The CMA has said that it will likely focus early enforcement action over the first twelve months after the introduction of the new DMCCA rules mentioned above on more egregious breaches of the consumer protection regime, including:
- aggressive sales tactics;
- behaviour where the CMA has already put down a clear marker through its previous enforcement work;
- practices which are always considered unfair under the DMCCA; and
- obviously unfair and unbalanced contract terms.
While the CMA’s immediate focus is on business engagement to ensure stakeholders have understood the requirements of the new regime, the CMA is monitoring businesses’ compliance to identify (i) any who have not yet changed their practices to come into line with the new regime; and (ii) those businesses whose amendments do not go far enough.
The CMA has already focussed on the travel industry, having published two open letters to the package travel sector in 2020 and 2021. In those letters, the CMA noted that complaints indicated that businesses may have been engaging in practices contrary to consumer protection laws, in particular the Package Travel and Linked Travel Arrangements Regulations 2018. The CMA also noted that complaints reflected that businesses were undertaking unfair commercial practices such as providing inadequate or misleading information to consumers about their statutory rights, in breach of the CPUT. Previously in 2019 the CMA obtained undertakings from a number of online hotel booking companies in relation to their compliance with consumer laws – see https://www.gov.uk/cma-cases/online-hotel-booking. This prior CMA interest increases the risk of further scrutiny by the CMA in relation to travel sector businesses and their compliance with the DMCCA and other consumer protection laws.
We anticipate that key enforcement risk areas for businesses in the travel sector will be:
- Failure to include all mandatory charges in the headline price e.g. taxes/booking fees/admin fees
- Fake or misleading reviews
- Complicated booking processes which manipulate consumer behaviour when purchasing
- Misleading environmental claims
- Misleading urgency, scarcity or popularity claims
- Misleading pricing, such as false savings claims
Next steps
The CMA’s new enforcement powers and previous regulatory focus on the travel industry, coupled with the updated unfair commercial practices rules in the DMCCA, mean that it will be crucial for businesses in the travel sector to ensure that their operations comply with consumer protection laws. To achieve compliance, we recommend reviewing the CMA’s guidance on the DMCCA, as well as the CMA’s recommendations for action set out in its two open letters to the industry.
Businesses should conduct thorough audits of their current practices to ensure compliance with the new DMCCA rules, including by reviewing online purchasing journeys, cancellation flows, terms and conditions, and policies and practices relating to reviews.
For more information on the DMCCA or any other travel law related query, please reach out to Neil Baylis.
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