UK consumer reforms speed up: subscription regime accelerated, pricing practices next in line?
Incoming UK consumer subscription regime accelerated
The UK Government has today announced that the subscription-related provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCCA) are now expected to enter into force in January 2027 (rather than spring 2027 as previously announced, discussed further here).
Draft secondary legislation and accompanying guidance on the new requirements is still awaited, following the publication of the Government’s response to consultation earlier this year. We currently expect draft legislation to be published in the autumn.
In light of this acceleration, businesses should ensure that time is set aside to review their customer subscription journeys, including renewal processes, cancellation flows and refund approaches, to ensure that they are aligned with the incoming new requirements.
More pricing practices under scrutiny?
Alongside these changes, the Government has announced plans to consult this autumn on banning further pricing practices outright under the DMCCA. The consultation will consider adding tactics such as fake “was / now” prices, invented discounts and misleading recommended retail prices to the list of automatically unfair commercial practices.
The UK Government’s announcement does not explain how this ban would operate in practice. While it may on its face appear simple to add a paragraph to the DMCCA list of prohibited practices, in reality it may pose quite a challenge for the Government lawyers responsible for drafting such legislative amendments and/or for the CMA when providing authoritative, business-friendly guidance. ‘Was / now’ price comparisons, for example, raise numerous issues around what level of price establishment is needed to support a genuine offer and about the duration and (if repeated) frequency of the promotion; and establishing that a comparison against a planned future price (e.g. for an introductory offer) is genuine brings its own challenges. The CMA recently withdrew its guidance on “was / now” pricing in the online mattress retail space in light of the High Court’s decision in the Emma Sleep litigation, demonstrating some of the potential difficulties with rigid rules (such as fixed volume ratios) to assess the legitimacy of reference pricing.
The announcement is another indication of the Government’s willingness to use the DMCCA as a tool for proactive consumer protection to help people with the cost of living. It also reflects increasing scrutiny of online choice architecture, pricing claims and recurring payment models, all of which have become key enforcement priorities for regulators in the UK and internationally.
Get in touch
If you have questions on the proposed new subscription rules or the proposed consultation on pricing practices, please reach out to a member of the team or your usual Freshfields contact. You can also subscribe to our DMCCA client toolkit for further updates and insights.
