The Digital Markets, Competition and Consumers Act 2024 (DMCC Act) has received Royal Assent. Among other things, it will make major changes to the UK's consumer protection regime. We explain why now is the time for B2C businesses to take a fresh look at their approach to compliance with consumer law.
The risks for business of infringing consumer law are about to increase substantially, mainly because of new powers that it confers on the Competition and Markets Authority (CMA):
The upshot is that the CMA will have a great deal more clout as a consumer regulator than it does under the current, relatively weak enforcement regime. With the cost of living crisis likely to remain high on the political agenda, the CMA is also likely to come under pressure to demonstrate that it is using these new powers to deliver a better deal for consumers. This step change in the enforcement environment requires a change in mindset from business when it comes to compliance – see section 3 below.
Until now, the CMA hasn't been able to do much about past infringements of consumer law – most investigations result in voluntary undertakings that focus on changing behaviour in the future. Once the new DMCC Act powers are in force, the CMA will be in a position to extract a much higher price from business over infringing conduct that's already taken place. Even where it's willing to agree voluntary undertakings, the CMA is likely to expect businesses to offer to "right past wrongs" as part of any deal to avoid a formal decision and the imposition of fines.
For a deeper dive into why we think the DMCC Act will prove to be a game changer on enforcement, see our earlier briefing.
Businesses will need to prepare for new rules on:
The new rules on subscription contracts changes are likely to require changes to both the process of "on boarding" consumers and managing the relationship afterwards. On reviews, we need to see guidance from the CMA about what counts as "reasonable and proportionate steps" – but many businesses are likely to be required to go further than they do at present to ensure that consumers are not being misled.
For more detail on what you can do to prepare, see section 3. Note also the Government has used the DMCC Act to "tidy up" UK consumer law more generally and there are a number of other changes which may be of interest for particular types of B2C business – see further section 2 of our earlier briefing.
Our understanding is that the CMA and the Civil Service had been working towards a "go live" date towards the end of 2024, although we are now unlikely to get further clarity on this until after the election in July. But our view is that the next Government will almost certainly implement the legislation – so businesses should get ahead of the curve and start preparing now, for example by asking themselves the following questions:
See section 4 for how we can help you address these issues.
We can help you to ensure that your business is prepared for these imminent changes. Our specially designed packages aim to equip you with the training, resources and analysis that you and your teams need to ensure your business is legally compliant and insulated from the most punitive aspects of the new regime. To find out more, please speak to any of the contacts listed below.
Finally, note that the DMCCA is not just about consumer law – it also makes important changes in the following areas, which may be just as important to your business:
Watch this space for further coverage of the legislation.
