Consumer Protection Law: New Enforcement Powers and What They Mean for Retailers
The Digital Markets, Competition and Consumers Act 2024 represents the most significant reform of UK consumer protection enforcement in decades. The Act grants the Competition and Markets Authority direct enforcement powers that will fundamentally change how consumer law is enforced in the United Kingdom, with substantial implications for retailers and online businesses.
Under the previous regime, the CMA could only enforce consumer protection law through court proceedings, a process that was often slow and resource-intensive. The 2024 Act introduces an administrative enforcement model, allowing the CMA to investigate potential breaches, make infringement findings, and impose penalties directly, without needing to go to court. This mirrors enforcement approaches in competition law and will significantly accelerate the pace of consumer protection enforcement.
The penalty regime is substantial. The CMA can impose fines of up to 10 percent of global annual turnover for breaches of consumer protection law. For individual directors and officers, personal liability and disqualification orders are available. These penalties bring consumer protection enforcement into line with the competition law regime and create a powerful deterrent against non-compliance.
The Act also introduces new substantive consumer protection provisions. Fake reviews and misleading online practices are directly addressed, with specific prohibitions on publishing or commissioning fake reviews, suppressing negative reviews, and presenting reviews in a misleading way. Subscription traps are tackled through mandatory pre-contract information requirements, cooling-off periods, and simplified cancellation mechanisms that must be at least as easy as the sign-up process.
Drip pricing, where additional mandatory charges are revealed late in the purchasing journey, is also addressed. Businesses must include all mandatory and unavoidable fees in the headline price. This will affect sectors including travel, entertainment, and online retail where additional booking or service fees have been common.
At Masl Legal, our Consumer Protection team advises retailers and online businesses on compliance with the new enforcement framework. We help businesses audit their practices, update terms and processes, and implement compliance programmes.
The CMA has signalled that it intends to use its new powers actively. Businesses should conduct a comprehensive review of their consumer-facing practices, terms, and marketing materials to ensure compliance before enforcement action begins.
