Businesses should ready themselves for the most significant change to UK consumer law in recent years, or face the potential consequences. From 6 April 2025, the Competition and Markets Authority (the CMA) will have the power to directly enforce consumer law (in the same way that it does competition law), including the power to impose fines of up to 10% of a business's global turnover.

Navigating the first phase of enforcement

The Digital Markets, Competition and Consumers Act 2024 (the DMCCA) reinstates and amends existing consumer law, whilst also introducing new provisions to reflect evolving consumer behaviour and modern purchasing practices.

In anticipation of its new powers, the CMA has issued informal guidance on its expected approach to early enforcement. Some key takeaways are as follows:

• A phased approach to enforcement on drip pricing – The first phase (from 6 April) will focus on banning genuinely unexpected and untrailed charges added on at checkout, where these clearly breach the new law, as set out in the final form of the unfair commercial practices guidance expected to be published before the law enters into force. Further consultation with interested third parties will take place in summer 2025, with specific drip pricing guidance expected in autumn 2025.
• No enforcement action for fake reviews – The CMA recognises that the new provisions to tackle fake reviews in the DMCCA may require changes to businesses' systems and compliance programmes. As a result, in the first three months (April to June), the CMA will instead "support businesses with their compliance efforts".
• Enforcement priorities – Early enforcement action will target more egregious breaches, such as aggressive sales practices preying on vulnerable people, contract terms that are very obviously imbalanced and unfair, and providing consumers with false information. When deciding on penalties, the CMA will take account of the proactive steps taken by businesses to correct infringing behaviour.

Enforcement guidance: Key takeaways

The CMA published its final guidance on direct consumer enforcement on 14 March, setting out what parties can expect in terms of engagement with the CMA when they are the subject of an investigation. The guidance also provides a number of practical examples of how the CMA expects to calculate fines.

The CMA has a range of information-gathering tools including powers to request written information, make test purchases, observe business conduct and enter a premises with or without a warrant.

Since the draft guidance was consulted on last year, the CMA has made some changes to ease the burden on businesses, such as by extending timeframes for written representations and providing helpful illustrations of what might amount to a "reasonable excuse" for non-compliance.

The CMA's wider toolkit

The CMA intends to use its new consumer enforcement powers alongside its existing competition law toolkit to support well-functioning markets. The Government's draft Strategic Steer calls on the CMA to use its full suite of tools, including its direct consumer enforcement powers, to "grow the economy through promoting consumer trust and confidence, while deterring poor corporate practices".

The new powers are being introduced against the backdrop of the CMA's "4Ps" framework – a programme for change designed to enable the CMA to keep true to the fundamentals of consumer welfare, while operating in a different way. It means that the CMA will be balancing the pace of investigations with proportionality for businesses, as well as ensuring a clear and robust process and predictability for the parties.

The CMA will also initiate an "extensive business outreach programme" to help businesses comply with the new regime.

Please contact a member of the Dentons team if you would like to discuss the changes to UK consumer law.