The Competition and Markets Authority (CMA) has recently published its intended approach to consumer protection under the new Digital Markets, Competition and Consumers Act 2024 (DMCC Act).
One of the key changes introduced by the DMCC Act is a new direct enforcement regime which gives the CMA powers to impose penalties (amongst other measures) directly on businesses and individuals for consumer law breaches, without the need to go through the court system. If the CMA concludes that a business has engaged in or is likely to engage in actions that constitute a consumer law breach it can impose penalties of £300,000 or 10% of global turnover, whichever is the higher.
The CMA says that it expects to concentrate its early action on the most serious of breaches where the law is clear, acknowledging that in respect of some consumer practices there is limited case law and the law itself is less clear cut. The report goes on to give examples of practices that the CMA will seek to enforce against in the early months of the DMCC Act’s introduction, including; aggressive sales practices that prey on consumers in vulnerable positions; providing information to consumers that is objectively false; banned practices including the new banned practice relating to fake reviews; fees that are hidden until late in the purchase process and contract terms that are clearly imbalanced and unfair, including those that impose unfair exit charges on consumers.
However, given the acceptance that the impact and consequences for business are greater under the DMCC Act than before, as well as the acknowledgement by the CMA that the law has been updated, but is not fully developed in respect of all consumer practices and is often not clearly defined, businesses should seek early advice on the impact the DMCC Act might have on its business practices and strategies. If your business does become the subject of a CMA consumer investigation or is otherwise contacted by the CMA about a consumer law issue, you should seek legal advice from a specialist.
