Sarah Cardell, the Chief Executive of the Competition and Markets Authority (CMA), recently gave a speech to Tech UK in which, among other things, she included a spoiler about how the CMA plans to approach the early stages of its new consumer law enforcement powers, which come into force from 6 April.

The CMA's new direct enforcement powers mean that the CMA will be able to decide whether consumer protection laws have been breached without having to take businesses to court; and it will be able to take direct action to tackle these breaches, including by issuing fines and ordering redress.

The CMA will publish its final guidance for the new regime at the beginning of April, as well as an approach document, which will contain its enforcement priorities for the first 12 months of the new regime, with a focus on the most egregious harms.

The CMA has been consulting on guidance for the new consumer regime and it acknowledges that the compliance burden must be proportionate, especially for smaller businesses. As a result, it will streamline the Guidance on Unfair Commercial Practices considerably with the aim of making it as clear and accessible as possible. Two areas have elicited a lot of feedback – drip pricing and fake reviews. 

Drip pricing

On drip pricing, the CMA has decided to take a phased approach to the guidance. In April, it will provide a clear framework for complying with the parts of the law which are already well understood and largely unchanged. This includes the prohibition of genuinely unexpected and untrailed mandatory charges added on at the end of a purchasing journey. 

For those aspects of the drip pricing guidance that have created more uncertainty (including fixed-term periodic contracts) the CMA will run a further consultation on revised draft guidance in the summer, with a view to producing finalised guidance in this area in the autumn. In the meantime, it will only take enforcement action against drip pricing which clearly breaches the rules in line with the April guidance.

Fake and misleading consumer reviews

Fake reviews are banned under the Act. Although the CMA can tackle fake reviews under its existing powers, and it refers to recent published undertakings, it recognises that new provisions may require changes to systems and compliance programmes. Therefore, for the first three months of the new regime, it will focus on supporting businesses with their compliance efforts rather than enforcement.

Enforcement approach

The CMA says that its early enforcement action is likely to focus on the most serious breaches. These might include aggressive sales practices that prey on vulnerability; providing information to consumers that is objectively false; or contract terms that are very obviously imbalanced and unfair.

However, it says it will support well-intentioned businesses who want to do the right thing, but who are unclear about what they need to do to ensure compliance, especially in areas where the law has been updated or is less clear-cut. When considering the appropriate level for any penalty, it will also take into account when businesses have taken proactive steps to correct infringing conduct.

So, what do YOU need to do?

As the consequences of "getting it wrong" increase significantly from April 2025, businesses should proactively review practices against the forthcoming streamlined Unfair Commercial Practices guidance to consider whether any current practices are likely to be open to challenge, and whether any changes need to be rolled out. 

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