Are you affected by the UK Digital Markets Competition and Consumers Act?

The UK Digital Markets Competition and Consumers (DMCC) Act 2024 received Royal Assent on 24 May 2024.

As a result, significant new consumer protection rules will take effect in Spring 2026.

Did you know about these changes?

The first we heard about the DMCC Act - which incidentally does affect our business - was an aside made by a BBC journalist during an episode of the Radio 4 Today programme a few weeks ago.

The aside made my ears prick up.

I had not hitherto seen or heard anything about the new Act and I do not live in a cave!

So the chances are that you too may not be aware.

Background Information

Puzzled, I took to the internet using my favourite search engine, DuckDuckGo.

Here's what I discovered.

First I landed on the website of the Competition and Markets Authority (CMA).

Here I learned that when the DMCC Act takes effect in 2026, the CMA will for the first time ever be able to decide whether key consumer laws have been broken rather than a court of law.

And if the CMA finds a consumer law breach then it will be able to impose remedies, which may include requiring firms to compensate customers.

Not only that, it will also be able to impose fines for breaches and failures to comply with information provision requirements.

Read more: UK Competition and Markets Authority.

I then gratefully discovered a very useful summary of how the DMCC Act will affect businesses which offer Subscription Services to customers on the website of law firm Brodies LLP.

The Brodie LLP article outlines how the DMCC Act:

• introduces new rights for consumers in subscription contracts, and
• imposes new duties on organisations.

Read more: The DMCC Act: Changes to Rules surrounding Subscription Contracts - 22 August 2024.

Impact of DMCC Act on Consumers

The DMCC Act will benefit Consumers significantly:

• subscription contracts will be more transparent;
• 'subscription traps' will be eliminated;
• subscription providers will have to provide clear subscription details and simple termination processes;
• consumers will be able to seek redress via the CMA should Subscription Service contract disputes arise in the future.

Impact of DMCC Act on Subscription Service Providers

The DMCC Act will also significantly impact Subscription Service Providers.

The Brodie LLP article states that the CMA's new enforcement powers will include the imposition of fines of up to 10% of global turnover as well as awarding compensation to consumers.

The impact on an organisation will be determined by a wide range of factors including whether or not it:

• has comprehensive Terms of Service (TOS) which cover its offer of Subscription Services,
• offers Subscription Services which renew automatically,
• charges a subscription fee which might increase during the subscription period,
• enables customers to subscribe digitally either via an app or its website.

The Brodie LLP article also identifies four key areas to focus attention on if an organisation offers Subscription Services:

• Provision of pre-contract information.
• Issuance of reminder notices.
• Exiting of contracts.
• Cooling-off rights.

How are we responding to the DMCC Act?

We are being proactive.

We are undertaking more research to help us decide what action to take before the Act comes into effect.

We are reviewing our:

• Terms of Service,
• Service Level Agreements,
• marketing materials,
• communication materials, and
• back office systems

as they relate to the provision of Subscription Services before the Act comes into effect in Spring 2026.