Digital Markets, Consumers and Competition Act 2024 (DMCCA)
Stringent requirements and huge fines affecting charities and for-profit companies equally
The government confirmed this week that most of the consumer protection elements of the DMCCA will be coming into force on 6 April 2025 i.e. in 3 weeks time!
Significant fines
On 6 April the Competition and Markets Authority’s direct enforcement powers kick in, with the ability to fine traders up to 10% of their annual global turnover for breaches of relevant consumer legislation, not just the DMCCA. Compliance with these laws is therefore something that should be taking on increased priority in many organisations’ risk registers. More information about enforcement in this blog.
Fake reviews and other unfair practices
The DMCCA will also see more specific compliance requirements in some cases with accompanying new “always unfair” offences (which are akin to strict liability offences) The new compliance requirements apply for the following:
- drip-pricing i.e. the practice of offering a low “headline” price but introducing additional mandatory charges throughout the booking process;
- fake reviews i.e. the practice of submitting (or having others submit) reviews not based on a genuine experience, or having others submit reviews without disclosing they have been incentivised to do so;
- hosting reviews without taking reasonable and proportionate steps to ensure the reviews are not fake ie having such reviews on your platform or advertising without doing sufficient due diligence importantly policy explaining what checks you do and
- subscription contracts – the DMCCA introduces a new regime to help try and avoid “subscription traps”, including additional information requirements and cooling-off periods (though these laws are not due into force until next spring). These rules, which will catch charity membership subscriptions, are covered more thoroughly in our blog here
Final guidance
Final guidance will be published around the same time as the legislation comes into force. Draft guidance was published in mid-December, but the government has indicated that there are likely to be some significant revisions to the sections on drip-pricing. There will also be separate follow-up guidance on drip pricing which will be consulted on over the summer.
Grace period
For the first 3 months there will be a grace period when the CMA will focus on supporting businesses comply with their obligations relating to fake reviews, rather than on enforcement.
Any charity that hosts reviews has until early July to put in place reasonable and proportionate checks to weed out fake reviews, and a public facing policy explaining what these checks are. For a preview of what this means in practice please see our article here.
Need help?
Our regulatory team has already had significant interest from clients around these new requirements, particularly in respect of fake reviews. Given that businesses will now have a little more time to prepare, we are well placed to assist any clients you have who may be impacted by these changes – whether that be in the form of...
- advising on what checks would be “reasonable and proportionate”
- preparing a consumer reviews policy (mandatory under the new guidance)
- reviewing their website or other materials for compliance (e.g. where they feature reviews or testimonials) or
- just advising more generally on the new laws, including the upcoming changes to subscription contracts.
If you have any questions please get in touch with Katrina Anderson [email protected]