Insights Initial thoughts on the consumer law aspects of the Digital Markets, Competition, and Consumers Bill

Well, it’s a doozy. All 388 pages of it.

It’s also extremely wide-ranging and prescriptive, more so than was anticipated. If enacted in its current form (and even if subject to some changes) this represents an entirely new landscape of consumer protection.

Let’s look at some of the headlines.

We knew these would be significant, and they really are.

The new two-fold enforcement regime – court-based, and CMA direct enforcement – positions the UK as probably the toughest regime of consumer law enforcement, even among its EU neighbours who already have newly enhanced consumer protection laws (under the Omnibus Directive and the Digital Content Directive, among others).

Key points include:

  • Potentially massive fines – up to 10% of global turnover, including that of parent/subsidiary companies.
  • Other enforcement actions include investigative powers and the power to issue or direct enforcement orders, undertakings, infringement notices, ‘enhanced consumer measures’, and online interface orders.
  • Enforcement powers will attach to a specified list of laws/rules listed in two schedules, and these are very broad, covering all the key current consumer protection laws (relating to e.g., unfair contract terms; statutory standards and consumer rights and remedies for the supply of goods/services/digital content to consumers; information requirements; cancellation rights; misleading omissions/actions; aggressive commercial practices, etc.) as well as a host of other existing laws including, of course, the Bill itself.
  • To qualify for enforcement, a commercial practice needs to meet a ‘UK connection’ test which is also broad and will catch pretty much any supply to a UK consumer (except where, say, the consumer has deliberately circumvented a geographical restriction).

These new, highly prescriptive rules represent a major change for any business using subscription models to supply content/services/goods to consumers.

The requirements include:

  • Detailed sets of pre-contract information to be provided to consumers, including rules as to content, frequency, timing, placement, prominence, etc.
  • Consumer reminders to be sent at certain points of the subscription contract, including very specific timings for these reminders.
  • The provision of easy and accessible means for consumers to end their subscription contract, meaning no unnecessary steps; a method of leaving that matches the method of sign-up (e.g., online sign-up, online exit); prominent and clear signposting; the ability to exit through a single communication; and the right for consumers to end the contract by means not actually provided by the business (so customer services operatives will need to be trained to look out for this).
  • New cooling-off rights, i.e., consumer cancellation rights at certain points of the subscription contract, and cooling-off notices to be sent by the business.

The Bill prohibits unfair commercial practices (i.e., misleading actions, misleading omissions, and aggressive practices), including by setting out a list of commercial practices which are in all circumstances considered unfair – so called ‘banned practices’.

This regime copies over (with only some amendments) and replaces the existing regime under the Consumer Protection from Unfair Trading Regulations 2008 (CPUT), which is going to be revoked.

Most significantly, the Bill enables the Government to amend the existing list of automatically unfair practices (previously in CPUT). This means the Government will be able to swiftly change/add to the list of banned practices, so there will likely be movement here in the future. In particular, the Government has indicated that it intends to consult on adding new banned practices relating to the commissioning of fake customer reviews and posting reviews without taking reasonable steps to check they’re genuine.

In short, it means that consumer law compliance is really, really important, and failure to comply will increasingly represent a material business risk.

Terms and conditions need to be fair (under the meaning of the Consumer Rights Act 2015), transparent, properly drafted, and clearly signposted to consumers. Advertising and marketing must be compliant and not misleading. Pre- and post-contract information requirements need to be complied with (e.g., via properly thought-out customer journeys and notifications), and statutory cancellation rights (both under the new Bill and existing laws) handled correctly. And this is to say nothing of the new the subscription rules.

It’ll be interesting to see what amendments are made to the Bill as it progresses through to enacted law but, however you slice it, the new enforcement regime will see quicker, more agile, and much more powerful repercussions for consumer law breaches; and a number of new hoops for businesses to jump through in order to comply.

No specific date/timeframes have been given for the Bill’s passage through to enactment, but there’s a useful tracker on the UK Parliament website here.

Some commentators have suggested that enactment may happen by the end of this year. That may be overly optimistic (or pessimistic, depending on your point of view) but there’s no doubt that there’s real momentum behind this legislation and the Government appears to be sticking to its commitment to expedite.

Further summaries and commentary on the Bill will be posted over the coming days – bookmark our tracker page for updates.