The UK’s Changing Consumer Rights Laws: What E-commerce Retailers Should Be Aware Of

Since the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) has received Royal Assent, we are bound to expect major changes to the UK consumer protection regulations. The new regulations address harmful trading practices, including price transparency and product information, while also making it easier for the Competition and Markets Authority (CMA) to enforce the law. What do you need to know and consider, and what changes will be imposed on e-commerce retailer obligations? Read on to find out.

Explaining The Consumer Protection Regulations in the DMCC Act

The new consumer rights laws in the UK are targeted at battling harmful practices used in online trade. As such, the focus of the Digital Markets, Competition and Consumers Act 2024 is on:

Unit Pricing

The Government suggests simplifying the Price Making Order 2004 to ensure that unit prices for all products are displayed. The goal of this is to enable consumers to compare prices easily.

Restricting Hidden Fees

Eliminating situations where consumers are lured by low prices and then extra costs are constantly added as they progress through the sales funnel.

Fake Reviews

Requiring companies to implement measures protecting consumers from making decisions based on false claims addresses the problem of fake and misleading reviews. Fake reviews are fully banned, including:

• publishing a few review,

• commissioning or incentivising a person to write or submit a fake review,

• offering or advertising to submit, commission or facilitate a fake review,

• misrepresenting reviews or providing access to them without making “reasonable and proportionate” efforts to ensure they aren’t deceptive or fake.

Professional Diligence

While e-commerce platforms are required to act with professional diligence, the Government believes that further legislation and training are needed to build relevant standards on such platforms.

E-Commerce Consumer Rights

The Government also expands the legal rights of consumers to cover areas such as:

• misleading omissions,

• breaches of professional diligence by traders.

Subscription Models

The DMCC Act also affects customer loyalty programs involving subscription models—especially those that give consumers a free trial, after which the client is automatically charged for the service/products. The new requirements involve:

• The obligation to send reminders before auto-renewal.

• The requirement to allow “cooling off” periods.
  

How to Ensure Compliance with the New “AGEC” Law?

The best way to get ready for the new e-commerce retailer obligations is to start doing so now. Adjust your refund and returns policies, ensure that you have a system for verifying reviews, adjust your pricing models to display unit prices and eliminate hidden fees.

The Government will start rolling out the new legislation by the end of 2024, though we should expect this process to last even until 2026. Nevertheless, it might be difficult to prepare overnight, so we recommend starting now.

New Consumer Legislation: Key Questions to Ask Yourself

. Answering these questions will help you determine how fast you need to be with implementing changes.

• “Are we sitting on a ticking bomb? How much time do we have to implement changes?”

• “Are our current processes up to the new standards? If not, which do we need to update and how? Do we have any ongoing projects that might require an update as well?”

• “Is our team, especially sales, aware of the changes and risks associated with non-compliance?”

• “Are we ready for a potential investigation by the CMA? Do we have all the information that the CMA might request available at hand?

The Takeaway

The new consumer rights law comes with numerous changes to e-tailers operating in the UK. With the increased power and competencies of the CMA and the potential for fees reaching up to 10% of your annual turnover, preparing your business for the new regulations is of the utmost importance.

You might also read: The Impact of the EU Digital Services Act on E-commerce: What Retailers Need to Know.