The impact of the Digital Markets Competition and Consumer Bill on enforcement

Why should I read this?

The Digital Markets, Competition and Consumer Bill ("DMCC Bill") proposes a number of key changes to UK consumer law, with the aim to update and strengthen the UK consumer law regime (especially in relation to enforcement action and subscription contracts). The Bill featured in the King’s speech on 7 November 2023 and is expected to become law in around Spring 2024. If implemented, the DMCC will be the biggest shake-up of UK consumer law in almost a decade, and is expected to push consumer law compliance up businesses’ legal risk register, given, in particular, by the proposed new enforcement framework being proposed.

DMCC Bill – overview of the enforcement regime

A new court based enforcement regime, Competition and Markets Authority (“CMA”) direct enforcement regime and updates to the investigatory powers under the Consumer Rights Act 2015 (“CRA”)

Under the court-based enforcement regime “enforcers” (including, the Competition and Markets Authority (“CMA”), Trading Standards and Financial Conduct Authority) will be able to apply for, and the courts will be able to make, interim and final enforcement orders. The CMA will also be able apply for, and the courts can make, interim and final online interface orders.

As well as further investigatory powers under the CRA, the DMCC Bill also proposes new direct enforcement powers for the CMA in respect of certain consumer protection laws. The current drafting provides the CMA with new powers to: (i) investigate suspected infringements; (ii) issue enforcement notices with regards to provisional and final infringements, breaches of undertakings and directions; and (iii) issue provisional and final information notices in respect of materially false or misleading information being provided to the CMA.

Financial penalties

The new penalties imposable by the CMA and civil courts under the DMCC Bill can be summarised as follows*:

Breach	Penalty
Engaging in commercial practices breaching consumer protection laws	Up to £300,000 or 10% of annual global turnover, whichever is higher.
Breaching an undertaking given to the court	Up to £150,000 or 5% of annual global turnover, whichever is higher. An additional daily penalty of up to £15,000 or 5% of daily global turnover, whichever is higher, while non-compliance continues.
Breaching without a reasonable excuse an undertaking given to a consumer protection enforcer	Up to £150,000 or 5% of annual global turnover, whichever is higher. An additional daily penalty of up to £15,000 or 5% of daily global turnover, whichever is higher, while non-compliance continues.
Non-compliance without reasonable excuse with an information notice given by a consumer protection enforcer	Up to £30,000 or 1% of annual global turnover, whichever is higher. An additional daily penalty of up to £15,000 or 5% of daily global turnover, whichever is higher, while non-compliance continues.
Providing without reasonable excuse materially false or misleading information in connection with a direct enforcement function of theCMA	Up to £30,000 or 1% of annual global turnover, whichever is higher.
Breaching without a reasonable excuse an administrative direction given by theCMA	Up to £150,000 or 5% of annual global turnover, whichever is higher. An additional daily penalty of up to £15,000 or 5% of daily global turnover, whichever is higher, while non-compliance continues.

* Strengthening consumer enforcement and dispute resolution: policy summary briefing

What can businesses start to do now in anticipation?

Whilst the DMCC Bill is not expected to become law in until around Spring 2024, businesses can start preparing for its implementation, to mitigate against the risks of the new increased enforcement regime being used against them. Steps which can be taken now include:

reviewing internal policies regarding legal risk decision making, escalation and logging of consumer law compliance and breaches
internal consumer law compliance audits. These could include:
- reviewing customer journey compliance
- reviewing and updating consumer terms and conditions
- auditing website compliance
- updating return and/or complaint policies
developing and delivering internal consumer law compliance training throughout the business (this could include training to teams such as marketing, customer complaint, legal and compliance)