What's the issue?
The Digital Markets Competition and Consumers (DMCC) Bill was published in April 2023. It is intended to regulate the market power of digital service providers and update rules on unfair commercial practices (read more here).
What's the development?
The DMCC Bill is approaching the final stages of the legislative process having returned to the Commons following its third reading in the House of Lords. It has been republished to include amendments made by the House of Lords on report. Here we focus on amendments made to parts of the Bill which deal with reform of consumer protection law. These include:
- New provisions have been added to address drip pricing, reflecting the government's intentions stated in January 2024. These add additional "material" information which must be included in any price-related marketing. This includes costs the consumer will necessarily incur (total price), and delivery charges including taxes which the consumer may choose to incur.
- The ban on fake review practices which was originally intended to be brought in by secondary legislation has gone straight into Schedule 19 of the Bill. The ban covers: submitting or commissioning another person to submit or write either a fake consumer review or a consumer review which conceals that it has been incentivised; publishing consumer reviews or consumer review information in a misleading way; publishing consumer reviews or consumer review information without taking reasonable and proportionate steps to prevent publication of fake consumer reviews/consumer reviews which conceal incentivisation, and removing such reviews; and offering services to traders for doing or facilitating any of these activities.
- Reminder notice information must be given in such a way that it is more prominent than any other information given to the consumer at the same time but it can now be included with other information rather than having to be provided as a standalone communication.
- Traders no longer have to enable a consumer to end a subscription contract "in a single communication". Instead, consumers must be able to do so "in a way which is straightforward". Consumers can also cancel a subscription contract by notifying a trader and the language has been amended so that consumers must make "a clear statement setting out their decision to bring the contract to an end".
- The DMCC Bill gives the government powers to impose further conditions and restrictions on the consumer's right to cancel through secondary legislation. A new example of such a restriction has been added to the face of the Bill to the effect that a consumer could lose the right to cancel during a cooling off period if they choose to be supplied with digital content or services under the contract during that period.
- There is an exclusion from the subscription rules for traders who frequently or regularly deliver food, beverages or "other goods intended for current consumption" to a home or workspace, and do not use a third party delivery service or allow consumer collection. Previously this had applied only to unincorporated services but the exclusion has been extended to cover any micro-entity or unincorporated trader meeting the micro-entity definition in the Companies Act.
- New transitional provisions address how the rules will apply to subscription contracts that were out-of-scope for the DMCC Bill's subscription rules when they were entered into but subsequently come within scope.
- The government intends to amend Gift Aid legislation to ensure charities can continue to claim tax relief on their membership subscriptions despite the DMCC Bill's cancellation and repayment provisions.
- A new Chapter 5 amends the Consumer Rights Act 2015 (adding a new section 92A) to impose additional requirements on secondary ticketing facilities.
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Under the original draft of the DMCC Bill, the CMA can apply to court for an online interface order if it considers a person has engaged, is engaging or is likely to engage in a commercial practice that constitutes a relevant infringement. Following consultation, the government decided to extend this power to public designated enforcers.
What does this mean for you?
The amendments will now be considered by the Commons and once any 'ping pong' process is completed, will move to Royal Assent. The government will also be consulting on secondary legislation governing returns and refunds under the new regime.
Some of the changes being brought in by the DMCC Bill, in particular around subscriptions, will be onerous for affected services. The government did, however, announce in February that the new subscription regime will not come into effect before spring 2026 which will allow time to update systems and terms of service where necessary.
Before then we will have a general election which may well result in a change in government, however, we expect the DMCC Bill to have passed before then and, given the response to it in Parliament, we do not expect there to be any significant rowing back of consumer-related aspects to be prioritised by the new government – whatever its political make up.
