New powers for the Competition and Markets Authority (CMA)
Today we are publishing our draft rules and procedural guidance covering an important aspect of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) – the new direct consumer enforcement powers of the CMA.
When these powers come into effect, for the first time the CMA will be able to decide whether key consumer laws have been broken rather than taking a case to court. If it finds a consumer law breach, the CMA will be able to impose remedies, which may include requiring firms to offer compensation or other redress for consumers. It will also be able to impose fines for breaches, including for breaches of remedies and failures to comply with information provision requirements.
These powers are expected to come into force next year. The precise timing is a matter for the Department for Business and Trade, but we will be ready to use our new powers to protect consumers whenever they come into force. As part of our preparation for using our new powers, we are asking stakeholders if they agree with our proposed approach set out in the draft rules and guidance.
Find out more about the consultation and how to respond through the response form or by email to consumerguidance@cma.gov.uk.
Please note this consultation will close on 11 September.
New and updated consumer rights
In addition to strengthening the CMA’s powers, the DMCC Act also makes changes to existing consumer rights. These include:
- updating the law on prohibited unfair commercial practices, including a new banned practice relating to fake consumer reviews and a prohibition of the ‘drip pricing’ of unavoidable fees. The CMA is working on draft guidance to assist traders in understanding their obligations, with a view to publishing this for consultation later in the year
- new protections for consumers in relation to subscription and saving scheme contracts. These include requirements for traders to provide certain pre-contract information and reminder notices in relation to subscription contracts, and insolvency protection requirements for traders offering consumer savings scheme contracts (such as Christmas saving clubs)
- unless expressly exempted, providers of alternative dispute resolution (ADR) services will need to be accredited and approved before they are able to provide ADR services and will face restrictions on the fees they may charge consumers
Stronger powers for other consumer law enforcers
The CMA’s direct consumer enforcement powers will exist alongside other court-based enforcement powers held by it and other enforcement agencies in the UK. The DMCC Act also makes some important changes to these powers. Most notably:
- a range of enforcers will be able to apply to court for fines for breaches of consumer law, breaches of undertakings (i.e. binding promises from traders to change their conduct) and non-provision of legally mandated information. The enforcers that will be able to use this power include Local Authority Trading Standards Services (LATSS) in Great Britain, the Department for the Economy in Northern Ireland and sector regulators such as Ofcom and the Civil Aviation Authority
- there is also a new power for LATSS, sector regulators and others in the network of public enforcers to seek court orders to modify, restrict access to or remove online content that infringes consumer law
As we prepare to take on the new powers that the CMA and others will receive under the DMCC Act, we remain committed to driving better outcomes for people, businesses and the UK economy. We look forward to working with our landscape partners and hearing from our stakeholders in this important moment for the UK’s consumer protection regime.
Areas also found in the DMCC Act
These consumer law and enforcement provisions comprise only one element of the DMCC Act, which also:
- creates the CMA’s Digital Markets Unit – see our recently closed consultation on digital markets competition regime guidance
- makes other changes to competition and markets regimes – these are covered by other CMA consultations. See for example consultation on updated CMA transparency and disclosure statement (CMA6), including new overseas investigative assistance guidance and administrative penalties: statement of policy
2 comments
Comment by GEOFFREY HUGHES posted on
CAN YOU CONFIRM YOUR TELEOHONE NUMBER?
Comment by Competition and Markets Authority posted on
Hi Geoffrey, our general enquiries phone number is 020 3738 6000