The Digital Markets Competition and Consumers Act 2024 received Royal Assent on 24th May 2024. The Act was introduced to provide additional provisions relating to the protection of consumer rights and regulate competition in digital markets.
Consumer protection
It aims to support consumers by helping them avoid subscription traps, hidden fees, and fake online reviews.
Subscription Traps
Businesses are now required to issue reminders to consumers when a free trial within a subscription is coming to an end.
Hidden fees
Hidden fees or dripped prices are now banned. Drip pricing occurs when a consumer is shown an initial price on an advert for goods or services, but additional costs are revealed later when the consumer goes to check out.
Fake online reviews
New protections against fake online reviews prohibit companies from writing fake online reviews without taking reasonable steps to confirm that they are genuine.
Digital markets
The Act aims to increase competition in digital markets by giving global companies “strategic market status” or “SMS” and imposing various requirements on them. Strategic market status will only be applied to a small number of companies that meet specific criteria, specifically those with a dominance in the digital market.
Enforcement
The Competition and Markets Authority (CMA) has been given enhanced enforcement powers. Instead of taking each case to court, the CMA can determine when consumer law has been broken.
The CMA can now impose penalties for:
- breaching consumer protection laws: this could result in a fine of up to 10% of a business’ global annual turnover or up to £300,000 per individual.
- breaching undertakings given to the CMA: this could result in a fine of up to 5% of a business’ global annual turnover or £150,000 per individual. There are also additional penalties for ongoing non-compliance.
- non-compliance with an information notice, concealing evidence or providing false information could result in a fine of up to 1% of a business’s annual global turnover or up to £30,000 for ongoing non-compliance.
For more information about this article or any other aspect of commercial law, get in touch with your Napthens Solicitors in Preston, Liverpool, and across the North West, today.
