By Alexandra Hammond
The Digital Markets, Competition and Consumers (DMCC) Act significantly enhances the Competition and Markets Authority’s (CMA) existing powers to regulate compliance with consumer and competition laws across the UK. The digital markets and competition enforcement powers are now live, having been implemented on 1 January 2025. In order to help businesses understand the impact of the new rules around consumer protection which are due to come into effect in April 2025, it is essential to dive deeper into the changing consumer law landscape.
Enforcement risk
The DMCC gives the CMA much greater, far-reaching investigatory powers to scrutinise potential unfair treatment of consumers. The existing court-based process will remain in place so these new powers broaden the CMA’s ability to uncover non-compliant activities, and businesses face a much higher risk of being investigated if the CMA identifies or is notified of unlawful behaviour.
From April 2025, individual directors and senior managers may face personal liability of up to £300,000 if they are considered to have acted as an ‘accessory’ by approving or agreeing to unlawful activity within their organisation. This is one of the most significant upcoming changes, which will clearly give rise to concern for senior leadership teams as they could face individual financial penalties for their involvement. Business leaders and executives will need to remain vigilant when signing off on content and updates as part of their internal approval processes to ensure they are not endorsing activities which may amount to infringing behaviour.
Financial liability also arises at a corporate level as the CMA can issue fines to businesses who are found to have breached consumer rules. These fines are linked to the turnover of the business in question and could reach as high as £300,000 or 10% of their worldwide turnover if a significant breach of consumer protection rules occurs. This potential financial liability sits alongside existing CMA measures, including the issuing of infringement notices and a requirement to give undertakings, and organisations are encouraged to keep a close eye on the thresholds for the application of these different enforcement actions by the CMA.
Ban on drip pricing
All businesses targeting consumer sales must now provide the ‘total’ price of a product to potential purchasers. Common additional fees include delivery charges, installation costs or booking fees, and these must be incorporated into the headline sales price from now on. Guidance issued to date indicates that it is not sufficient to provide different elements which make up the total price, as this would amount to drip feeding the consumer with pricing information.
More broadly, price promotions remain a key focus area for the CMA. UK mattress retailers, Emma Mattress and Simba Sleep, have come under recent scrutiny due to misleading online sales practices for consumers. Promotional activity involving countdown timers and popularity claims are likely to invite closer examination by the CMA as they could be falsely inflating the availability of products and promotional pricing campaigns. Businesses should be mindful of the CMA uncovering similar unfair commercial practices in other sectors.
Retailers should review and update all adverts and price listings, particularly in respect of e-commerce sales channels, to avoid falling foul of these key consumer protection rules.
Consumer reviews
Consumer-facing businesses must take a much more pro-active approach to prevent and remove misleading reviews of their products and services from April 2025. Reviews must be shared in a transparent way, detailing review scores and ratings clearly, ensuring that positive reviews are not displayed more prominently than negative ones. Businesses are also no longer permitted to publish incentivised reviews without tagging them to acknowledge they are incentivised, so care must be taken to clearly identify reviews in this category to allow consumers to recognise them.
The requirement to actively sift through reviews will mean businesses have to dedicate more time and resource than ever before to this aspect of consumer relations. This may be an area where technology can help drive efficiency, as an increasing number of organisations are using AI to help filter large volumes of content. Most businesses may choose to adopt a combination of technology and human resource to implement a reliable process, given the significant consequences of fake or misleading reviews inadvertently being published.
Good business practice
Implementing policies and procedures to embed consumer law compliance is paramount for businesses who wish to avoid negative financial and PR consequences. Consider these practical tips to help mitigate the risk of non-compliant behaviour and provide a positive customer experience:
- Undertake staff training, particularly those in sales and marketing teams, to ensure they are aware of the new rules
- Review and refresh your consumer pricing policies and strategies to take account of the latest CMA guidance
- Consider adding further resource or rolling out technology solutions to help monitor product and service reviews efficiently and ensure you adopt a transparent approach when publishing feedback
About Foot Anstey
Foot Anstey LLP is a UK top 100 full-service law firm. Renowned for its exceptional client service and sector specialisms, Foot Anstey offers expert and actionable advice across its seven key sectors: Developer, Energy and Infrastructure, Islamic Finance, Private Equity, Private Wealth, Charities and Retail and Consumer.
About the Author
Alexandra Hammond is a partner in Foot Anstey’s Commercial, Tech & Data team and advises on all types of commercial agreements, specialising in contract and consumer law in the retail and consumer sector. Prior to joining Foot Anstey, Alexandra held interim roles as General Counsel for key retail clients.
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