1. CMA will be able to enforce consumer law directly

• The CMA has been increasing its focus on practices which cause consumers harm for several years. In particular, it has been bolstering its enforcement action against online businesses and online choice architecture decisions that may mislead consumers. The CMA has until now however lacked the tools to enforce against unfair behavior itself.
• The Act changes that. The CMA will now itself be able to decide if certain consumer laws have been breached, investigate behaviors, require changes to trading practices and impose financial penalties - all without recourse to the courts.
• The CMA will still be able to make use of its enforcement powers via civil and, in the most serious cases, criminal courts. However, we expect the authority to make full use of its direct enforcement capability, with a likely surge in investigations once these powers take effect (expected in stages later in 2024).
   

2. Companies face fines of up to 10% of annual global turnover for consumer protection law breaches

• These new penalties bring the CMA’s enforcement powers up to speed with its equivalent in the antitrust space. It will be interesting to see whether parental liability rules for owners of consumer businesses also follow the same path as antitrust (i.e., whether shareholders will be found liable for the conduct of their subsidiaries).
• Companies will also face fines of up to 5% of global turnover for breaching undertakings or administrative directions and up to 1% of global turnover for other procedural breaches such as providing false or misleading information to the CMA during its investigation.
• CMA decisions which could lead to the imposition of a financial penalty will be subject to a full merits appeal. This is an important safeguard given that we expect the CMA to pursue many consumer protection cases that are novel and/or test the boundaries of its new powers, particularly in the digital space.

3. Individuals can be subject to fixed penalties

• Individuals will also have liability under the regime and if found to have breached consumer protection laws could be fined up to GBP300,000.

4. Fake reviews added to the list of banned commercial practices

• Submitting or commissioning a fake review, or a review that conceals the fact that it has been incentivized, will be automatically considered an unfair trading practice. As will publishing a consumer review in a misleading way.
• Publishing consumer reviews without taking “reasonable and proportionate” steps to prevent the publication of (or the removal of) fake reviews, reviews that conceal the fact that they have been incentivized or false/misleading review information will also be banned.
• Such unfair practices will be subject to civil, rather than criminal, liability.
• New guidance will be published to help businesses comply with the new rules.

5. Hidden fees and unavoidable drip pricing prohibited

• Businesses must advertise all mandatory fees and charges upfront (e.g., booking fees for cinema and train tickets). They must also disclose the existence of any variable mandatory fees (e.g., delivery fees) and how these will be calculated. Any “invitation to purchase” that omits “material information” will therefore be deemed an unfair commercial practice.
• Significantly, enforcement will not depend (unlike other prohibitions) on demonstrating that such practices influenced a consumer’s transactional decision.
• The government will keep the impact of optional drip fees (e.g., airline seat and luggage upgrades for flights) under review.

6. Rules against online subscription traps tightened

• Under provisions expected to come into force no earlier than spring 2026, businesses will be required to for example:
  
  provide clear information to consumers before they enter a subscription contract, including notice period and steps to bring a contract to an end.
• issue a reminder to consumers when a free trial or introductory offer is coming to an end, and a reminder before a contract auto-renews onto a new term.
• ensure that consumers can exit subscriptions in a straightforward way (consumers will have the right to terminate by making a clear statement setting out their decision to bring the contract to an end).
• reimburse consumers for any overpayments made once a subscription has been exited.

7. CMA able to enforce secondary ticketing rules

• Although there was disagreement in Parliament over the rules applying to secondary ticketing facilities, with the House of Lords pushing forcefully for additional obligations, in order to get the legislation passed before Parliament was dissolved pending the U.K. general election, the House of Lords ultimately conceded its position.
• The Act therefore bolsters the enforcement of the existing secondary ticketing provisions in the Consumer Rights Act (e.g., by enabling the CMA to enforce the rules) but does not go further than that.
• The government may look again at this area in future.