Consumer laws in the UK are undergoing a revolution and, as part of those changes, the Competition & Markets Authority (CMA) is becoming a hugely powerful regulator of consumer laws – capable of initiating and conducting its own investigations, deciding whether a company has breached consumer laws (without involving the courts), and unilaterally issuing a financial penalty of up to 10% of annual global turnover.

The latest rules are contained in the Digital Markets, Competition and Consumers Act 2024 (DMCC). At Lewis Silkin, we are on a mission to help our clients ‘Get DMCC Ready’.

Jason Freeman, a Legal Director at the CMA, has shared his thoughts with Lewis Silkin on how the CMA will interpret the DMCC, how the DMCC will change the law regarding unfair commercial practices, and the enforcement of consumer law more generally.  

Below, in the first of a short series of articles, Jason sets out the key changes he sees the Act making to the law regarding unfair commercial practices including drip pricing and fake consumer reviews.  

Read on to understand the CMA perspective on these fast approaching changes to the law.

New Rules on Unfair Commercial Practices 

(by Jason Freeman, Legal Director, Competition and Markets Authority)

Unfair commercial practices have since 2009 been regulated in the UK by the Consumer Protection from Unfair Trading Regulations 2008 (CPUTRs), which was the UK’s implementation of the EU Unfair Commercial Practices Directive. It is anticipated that from April 2025, Part 4 Chapter 1 of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) will replace and restate these protections. The DMCC Act makes a number of important updates to the law. In particular it clarifies the breadth of certain key definitions; streamlines and/or removes certain legal tests for assessing the unfairness of commercial practices; prohibits the ‘drip pricing’ of mandatory charges; and adds a banned practice relating to fake consumer reviews.

Drip Pricing

One significant structural change is that the invitation to purchase provisions will no longer be a subset of misleading omission, and instead are covered in a separate section (s.230). Importantly, there will be no need to consider likelihod of impact on transactional decision, so this provision is effectively a new banned practice. 

An ‘invitation to purchase’ occurs whenever a trader indicates the characteristics of a product and its price, and this enables (or purports to enable) the consumer to decide whether to take any transactional decision in relation to the product. One of the pieces of information that will have to be given is ‘the total price’ of the product -which must include all the charges that the consumer will necessarily incur if they purchase the product. The provision addresses the problem of drip pricing, where mandatory price components are revealed gradually throughout the purchasing process, and partitioned pricing, where parts of the price might be displayed at the same time separately. The DMCC Act makes clear that the consumer must be shown the total as soon as any pricing information is displayed. 

Fake Reviews

Another important update is the inclusion of a new banned practice to tackle the problem of fake reviews and misleading review information (DMCC Act Sched 20 para 13). Paragraph 13 creates a number of prohibitions. One is submitting or commissioning fake reviews or concealed incentivised reviews. This could include posting a review of a hotel, when in fact the reviewer has not been to that hotel, or asking a marketing agency to source fake reviews. It would also include failing to identify a paid for review as an advert. 

Another prohibition is publishing consumer reviews or consumer review information in a misleading way. This could include displaying a single star rating based on the reviews given by many users, when in fact some of those reviews are fake. 

A further prohibition is offering services to procure banned reviews and information for traders -for example offering a service to traders that involves setting up and running groups on social media to recruit individuals willing to post fake reviews or concealed incentivised reviews about a trader’s products.

In addition to prohibiting the commercial practices set out above, the banned practice imposes a positive obligation on anyone who publishes or provides access to consumer reviews or consumer review information to take such reasonable and proportionate steps as are necessary to prevent and remove from publication banned reviews and false or misleading consumer review information.  Failure to take these steps amounts to an infringement of the banned practice.

These prohibitions clarify the existing legal position, and to some extent there is overlap with the long established requirements of professional diligence, misleading actions and omissions and the other banned practices contained in paragraps 12 and 25 of  Schedule 20 to the DMCC Act. The CMA has previously taken enforcement action under the corresponding provisions of the CPUTRs to address problems related to fake or misleading reviews. Existing guidance includes how review sites, influencers and other businesses should ensure they are presenting the full picture. The CMA has also set out a number of proactive steps that platforms should take under the existing law to prevent and tackle hidden advertising on social media. These include a requirement to ‘take appropriate, proportionate, proactive steps and use available technology to prevent hidden advertising from appearing on your site,’ which anticipates the paragraph 13 prohibition. 

Part 3 of the DMCC Act gives the CMA the power to decide whether certain consumer laws have been infringed, and allows the CMA and the courts to impose substantial monetary penalties for infringements. This increases the risks substantially for failing to comply with consumer legislation, so it is important for businesses to review their practices to ensure they comply with the new rules.

The CMA is currently consulting on guidance on the unfair commercial practice provisions of the DMCC Act, which sets out much more detail on the new rules, and steps traders could take to avoid non compliance. The consultation can be found here.