In May of this year, the UK Government passed the Digital Markets, Competition and Consumers Act (DMCC) into law. The DMCC is wide-ranging and covers three key areas: consumer law, digital markets, and merger and antitrust law.

In the first of our series of blog posts, we set out key points on the significant changes to consumer laws and regulatory enforcement powers of which US businesses selling to UK consumers need to be aware ahead of the law coming into force, which is expected to be later this year.

Fake Reviews

There are new rules prohibiting fake consumer reviews, which will automatically be deemed to be unfair practices. This includes submitting or commissioning fake consumer reviews, failing to notify where a consumer has been incentivised to give a review, or publishing consumer reviews or summaries in a misleading way. Where businesses fail to take reasonable or proportionate steps to either prevent initial publication or subsequent removal of fake reviews, they will also be caught. Further guidance is expected to assist businesses with determining what checks and processes will be required in order to show that reasonable and proportionate steps have been taken. This could include auditing the nature and scope of fake reviews on commerce platforms and implementing processes to detect and remove fake reviews. While some of this work can be automated, it is likely to result in a significant increase in compliance costs.

Subscription Contracts

The DMCC introduced new rules relating to subscription contracts (which automatically renew until they are cancelled by the consumer). Businesses using business-to-consumer subscription contracts will (from spring 2026 at the earliest) need to:

• provide specific pre-contract information to consumers to make sure that they understand what they are signing up for, which must be delivered in a specified way – i.e., sign-up will need to be tailored for UK consumers;
• provide periodic reminders prior to the end of free trial or discount periods, and at relevant six-month intervals going forward;
• give customers an easier route to cancel a subscription, including by giving a clear statement (for example by e-mail), rather than being restricted to a specific medium (for example an online cancellation page), which may require changes to internal processes and procedures and potentially a greater burden in monitoring customer communications;
• understand the restrictions on using retention offers or other methods to entice consumers to stay and/or make it more difficult to cancel; and
• give consumers a non-waivable cooling-off right to cancel a subscription within 14 days of a qualifying renewal period (not just on initial sign-up), including (i) following the end of a free or discount trial period, or (ii) after any renewal where the customer is committed to a renewal term of at least a year.

The DMCC excludes a range of contracts in Schedule 22 to which these rules will not apply, and which the Secretary of State may update from time-to-time, including contracts for:

• the provision of electricity, gas and energy;
• services of a banking, credit, insurance, pensions or investment nature;
• medical prescriptions or goods, services or digital content where these are provided by regulated health care professionals;
• the supply of goods, services or digital content by certain entities regulated by the UK regulator OFCOM (providers of electronic communications networks or services, such as telecoms or internet service providers);
• residential rent;
• package holidays and timeshares;
• childcare; and
• gambling.

Drip Pricing

Businesses will also no longer be able to use “drip pricing” in consumer contracts – i.e., advertising one base-level price only for consumers to find that unavoidable additional fees/costs make the actual price paid higher on check-out. The UK Government estimates that unavoidable fees cost consumers £2.2bn every year, so the aim of the legislation is to increase transparency for customers so that they have a clearer view of what they will or may spend as early as possible in the process of making a purchase.

The greatest concern is with unavoidable, mandatory fees (e.g., service or booking fee, or tax being added on over and above the initial stated price). These must be included in the headline advertised price or, if it is not possible to calculate the fees in advance, an explanation of how such fees will be calculated should be provided up front. Fees for optional extras, such as paying to reserve airline seats or luggage upgrades for flights are not included in this requirement. However, any delivery fees or taxes which are optional because, for example, free collection is available, must still be treated in the same way as unavoidable fees and must be stated as part of the headline price or a basis for calculation should be given up front.

There will be no requirement to prove the effect of such pricing on a consumer’s decision to continue with the transaction in order for the UK regulator, the Competition and Markets Authority (CMA), to act against a business. This will make enforcement easier and likely to increase the practical risks for businesses.

Consumer Prepayment Schemes

Consumers will also be given greater protection in relation to consumer prepayment schemes (i.e., where the consumer makes payments as a form of saving for goods, services or digital content to be provided at some later date). Businesses must set up insurance or a trust arrangement to protect against losses for consumers in the event of an insolvency.

CMA Enforcement of Consumer Law

The DMCC introduces a dual enforcement regime. This gives the CMA investigatory and enforcement powers, alongside the current (enhanced and simplified) enforcement powers of the courts, covering both existing consumer and e-commerce laws, and new rules introduced under the DMCC.

Cases will no longer need to go through the courts. The CMA, under its new direct enforcement regime, will be able to issue fines of up to:

• the higher of 10% of global annual turnover or £300,000, where firms selling to UK consumers are found to breach consumer laws;
• the higher of 5% of global annual turnover or £150,00, where a business has breached an undertaking it has given to the CMA;
• the higher of 1% of global annual turnover or £30,000, where a business under investigation either fails to respond to an information notice, or provides materially false or misleading information to the CMA (with such notices now being given extraterritorial reach so that the CMA may request information from people outside the UK); and
• up to £30,000 for individuals,

In each case there will be potential additional daily penalties for continued non-compliance.

In addition to fines, the CMA will have the ability to impose:

• enhanced consumer measures, such as requiring compensation for consumers; and
• online interface notices, such as restricting access where a company is non-compliant or requiring the display of a specific warning to consumers on a company website.

Next Steps and Timing

The DMCC (for the most part) is expected to come into force in Autumn 2024. Exact timing will be confirmed through secondary legislation now that a new government is in place following the UK’s general election earlier this month. Businesses are expected to have a longer lead-in time with respect to subscription contracts under the proposed transitional arrangements (likely in Spring of 2026), to implement the requirements, such as updating customer onboarding processes.

The priorities for the CMA are likely to be the focus on fines in the consumer protection sphere – in particular, relating to hidden fees and fake reviews in the e-commerce market. US businesses selling into the UK market should be aware of the new requirements as well as the risk of increased consumer follow-on claims following CMA decisions against them.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.