Digital Markets, Competition and Consumers Act 2024 (DMCC): An Overview

There have been ongoing concerns about subscriptions in the UK and how consumers may fall into unintended subscription traps.

A subscription trap refers to when a consumer is tied into paying regular payments for subscriptions, they may not necessarily need or want, or that they may have forgotten about.

There are a few reasons they may fall into these trap:

1. they are unable to cancel;
2. the way to cancel is unclear or onerous; and/or
3. they forget the subscription is ongoing.

The DMCC addresses some of these concerns, with the intention to protect consumers.

For this reason, parts of the DMCC are drafted heavily in favour of consumers, rather than the companies offering subscriptions.

The main elements of the DMCC in relation to subscription contracts include:

1. how the subscription contract needs to be clearly explained to consumers at the start;
2. free trial regulation and how consumers may exit the subscription at the free trial stage;
3. increased notification obligations (e.g. reminding consumers they are in a subscription and their ability to cancel); and
4. a requirement for an easy cancellation process.

A few contracts fall outside the scope of the DMCC, including those excluded for policy reasons or regulated under other rules.

If a company fails to comply with the DMCC, the consumer may have the right to cancel the subscription and be entitled to a refund.

There are also offences for failure to comply with certain aspects of the regime and fines may be issued – the CMA may impose fines of up to 10% of turnover.

If your company offers a subscription to consumers, we would suggest that you review your:

1. sign up process and pre-contract information;
2. free trials;
3. cancellation policy (for free trials or otherwise);
4. cancellation process; and
5. consumer notifications.