New Act changes, and adds to, the list of practices always considered unfair. Direct enforcement and fines now more readily available for breaches.
What's the issue?
- The law governing unfair commercial practices by traders to consumers was contained in the EU-derived Consumer Protection from Unfair Trading Regulations 2008 (CPUTRs or CPR). They not only govern issues concerning the contract of sale, but the advertising and marketing of products, and ensure that consumers are treated fairly.
- The new Digital Markets, Competition and Consumers Act 2024 (DMCCA) revokes the CPUTRs and replaces them with similar (but enhanced) provisions. Commencement is from 6 April 2025.
- Businesses should ensure that they are meeting their new obligations, not least because the DMCCA will also give the regulator, the Competition and Markets Authority (CMA), new powers to enforce consumer laws directly, including to issue fines of up to £300k or 10% of a businesses' global annual turnover (whichever higher). More in our article here.
What's changed?
As with the CPUT Regulations, the DMCCA contains a list of commercial practices which are in all circumstances considered unfair. The new list builds on and adds to the practices already contained in the CPUT Regulations and reflects wider attempts by regulators to address dark patterns and other unfair practices.
The existing and new provisions are compared in full in this table. The following changes are particularly worth noting:
- Fake and misleading consumer reviews. The list now includes various provisions banning the submission, commissioning and publishing of fake and misleading consumer reviews and review information, as well as the offering of such services to traders. For more on this, see our article here.
- Pressure selling. The prohibition on pressure selling by falsely stating that a product will only be available for a limited time has been slightly broadened. This reflects wider concerns about online choice architecture and dark patterns (more in our article here).
- After-sales services. The two provisions concerning after-sales services have both been broadened as regards changes of language (as part of the service) and the availability and location of the service.
- Personal security and safety. The prohibition on making materially inaccurate claims concerning personal security now extends to personal safety as well as to anyone living in the consumer’s home (and not just the consumer and their family).
- False medical claims. The provision about making false medical claims has been significantly enhanced to include, for example, falsely claiming that a product is able to modify a person’s appearance and to expressly cover conditions of the mind. It also now relates to claims that a product is able to "prevent or treat" as well as "cure", again reflecting a broader scope. This no doubt reflects concerns about the advertisement and sale of products and treatments online.
All the other changes are largely cosmetic or for clarity. Note that a proposal to add greenwashing to the list of practices always considered unfair did not make it into the final version of the DMCCA and seems unlikely to be added in the short to medium term.
Power to amend list of always unfair practices
The DMCCA gives the Secretary of State power to amend the list of practices always considered unfair using secondary legislation (as well as to extend individual rights of consumer redress). This should give the government greater scope to respond to changes in the marketplace.
What does this mean for you?
- The CMA has already indicated that early enforcement action using its new powers of direct enforcement will focus on the most egregious breaches of the DMCCA, including breaches of the practices always considered unfair.
- Businesses should therefore ensure that they are complying with these provisions including the new provisions around fake and misleading reviews – see here.
- Other practices always considered unfair (which businesses can sometimes inadvertently fall foul of) include false 'time limited' claims, failure to clearly identify advertorials, various practices around prize competitions, and direct appeals to children/parents to buy advertised products. While these have not changed significantly or at all, the risks of getting things wrong have now increased substantially.
- Businesses should review their processes and systems, train staff and might need to undertake risk assessments, draft new policies and embed a compliance by design approach.
