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UK Digital Markets, Competition & Consumers Act 2024

The UK Digital Markets, Competition & Consumers Act 2024


Commercial Insight


July 3, 2024
The read

I didn’t sign up for this…


Businesses who operate subscription models of revenue generation with consumers beware – there is a regulation on its way that will have a significant impact on how you do business – and the fines for getting it wrong are potentially huge! The UK Digital Markets, Competition and Consumers Act 2024 introduces changes aimed at enhancing consumer protection and promoting fair competition. A key focus of the Bill is the regulation of Business-to-Consumer (B2C) subscription contracts, which are prevalent in sectors such as streaming services, software, and content provision.

Key changes

The Bill mandates greater transparency and fairness in subscription contracts that fall within its scope. Many businesses will be required to provide clearer information at the point of sale, ensuring that consumers understand the terms, costs, and renewal conditions. The Bill introduces a requirement for businesses to offer a straightforward and accessible cancellation process. This aims to eliminate the common issue of consumers finding it difficult to terminate subscriptions. It will take the place of and is different to, the current ‘distance selling’ regulations, which will continue to apply to other types of remote contracts.

Impact on subscription businesses
  1. Enhanced disclosure obligations: Companies will need to clearly outline key contract details upfront. This includes the duration of the subscription, the total cost, and any conditions for renewal or termination. Ensuring this information is easily accessible and comprehensible will be vital.
  2. Simplified cancellation process: The Bill aims to make cancelling a subscription as easy as signing up for one. Businesses must review and potentially redesign their cancellation processes to comply which may involve streamlining online cancellation forms or improving customer support systems.
  3. Renewal notifications: The Bill also introduces the need for timely renewal reminders. Businesses must notify consumers before their subscriptions renew, providing ample time for them to decide whether to continue.
  4. New cooling off periods: Businesses will have to offer additional cooling off periods after renewal as well as at the start of a subscription contract.
  5. Penalties: Non-compliance with these new regulations can result in fines of £300,000 or 10% of total turnover in some cases. Businesses must therefore invest in compliance measures, including staff training and updating their terms and conditions.

The UK Digital Markets, Competition and Consumers Act 2024 represents a significant shift towards greater consumer protection in the digital age. Businesses reliant on subscription models must take proactive steps to ensure compliance, focusing on transparency, ease of cancellation, and clear communication with consumers. Investment in compliance measures, staff training and reviewing terms and conditions need to take place well before the regulations come into force – expected to be later this year. Adapting to these changes not only mitigates legal risks but also fosters consumer trust and loyalty – act now and make sure you are ready for the changes when they come.