New UK Consumer Protection Regime to Go Live in April 2025

The Digital Markets, Competition and Consumers Act 2024 is set to transform the UK’s consumer protection regime by empowering the Competition and Markets Authority to impose penalties of up to 10% of global group turnover for unethical or misleading business practices. In light of growing public and political scrutiny of certain consumer advertising and marketing practices—ranging from misleading price discounts, drip pricing, and fabricated online reviews to conduct that has been viewed as more standard in nature, such as unilateral changes of terms and conditions—businesses should identify high-risk areas and reinforce compliance and mitigation measures ahead of the imminent April enforcement date.

Since the Digital Markets, Competition and Consumers Act 2024 (DMCC) received parliamentary approval in May 2024, government and regulatory statements have provided a clearer roadmap for its implementation.

The government has now confirmed that April 2025 will mark the start date for the Competition and Markets Authority’s (CMA’s) new “dual track” enforcement powers, which give the authority the option to either proceed via the courts (as before) or act under a direct administrative enforcement regime. The latter is exclusive to the CMA and is modeled on the CMA’s competition law enforcement powers—placing consumer law infractions on par with antitrust offenses, including fines of up to 10% of global turnover.

Examples of commercial practices expected to attract regulatory attention under the new direct enforcement regime include the following:

• Unilateral Variation of Terms: Reserving the right to change contractual terms or prices at any time without the consumer’s express agreement to the subject changes.
• Inadequate Pricing Disclosures: Advertising false or inflated “discounts” (where a higher reference price was never genuinely in effect), using “drip” pricing that initially omits mandatory add-ons (referred to by the US Federal Trade Commission as “junk fees”), or failing to clearly outline all fees from the outset.
• Unfair Default or Penalty Charges: Imposing excessive charges for cancellations or damages, particularly where fees are not transparently disclosed.
• Misrepresentation of Consumer Rights: Restricting or concealing statutory protections (e.g., cooling-off periods), limiting the right to return faulty goods, or failing to inform consumers about available remedies or complaint procedures.
• Misleading Product or Service Claims: Presenting goods as “environmentally friendly” or “sustainable” without adequate substantiation, overpromising product capabilities, or otherwise misrepresenting key or material attributes of the product or service.
• Aggressive or Pressure-Based Sales Tactics: Suggesting false scarcity to rush consumers into purchases, using misleading “countdown timers,” or creating an impression that an offer is limited as to time or quantity when it is not.
• Subscription Traps: Making it difficult for consumers to cancel or opt out of recurring contracts or lacking clear information on auto-renewals and termination rights.
• Deceptive Endorsements or Reviews: Generating or manipulating online reviews, testimonials, or endorsements to provide an inaccurate portrayal of consumer satisfaction.

The CMA’s broadened powers coincide with heightened public scrutiny of practices such as drip pricing, misleading sustainability claims, and aggressive sales or subscription tactics. The CMA has long focused on these issues, publishing several sector-specific enquiries over recent years. Notably, it recently finalized guidance for recommendation-platform businesses and issued compliance advice on topics ranging from unregulated legal services to “greenwashing” in the fashion industry.

Organizations operating in these or similarly regulated areas should review their practices to ensure alignment with both the new DMCC framework and any relevant sector-specific guidelines when assessing risk and updating compliance procedures.

RISKS FOR BUSINESSES OPERATING IN THE UK

• Potential for burdensome regulatory investigations into suspected infringements (including extensive disclosure (discovery))
• Infringing businesses will face legally binding orders to cease the practice as well as material fines of up to 10% of global group turnover and up to £300,000 (approximately $375,647) on individuals
• Significant reputational damage for the business as well as implicated directors; the latter may also face a director disqualification order of up to 15 years under certain conditions
• Exposure to claims for damages from affected consumers (including potentially collective claims)

The CMA may also use additional compliance measures, such as issuing a warning or advisory letter, to highlight concerns about potential consumer law breaches and encourage compliance. While there is no legal obligation to respond to these letters, the CMA may consider any reply—or lack thereof—when deciding whether further enforcement action is warranted.

HOW TO PREPARE

With less than two months until the April 2025 start date, businesses—especially those in consumer-facing sectors—should carefully audit marketing strategies, pricing policies, and contract terms. Particular attention should be paid to how prices, mandatory fees, and potential penalties are disclosed.

Consumer-facing documents ought to be reviewed and updated to align with existing and upcoming consumer protection requirements, and recurring customer concerns ought to be reviewed periodically to spot any underlying or systemic issues. Consumer protection audits and assessments of specific practices should be ideally carried out by counsel to ensure that any conclusions are protected by legal professional privilege and not discoverable in the event of an investigation or court proceedings.