Consumer friendly compliance – guidance for retailers and consumer brands on the DMCC Bill

15 May 2024. Published by Tania Williams, Partner and Eve Matthews, Associate

What is happening?

Following receipt of some 372 responses to the "Smarter Regulation: Improving consumer price transparency and product information for consumers" Consultation, the government has published its response (the Consultation Outcome) in which it proposes significant amends to the Price Marking Order alongside new additions to the DMCC Bill.

Why does it matter?

Substantially reflecting the recommendations made in the CMA's corporate report on unit pricing in 2023, some of the key proposals include the following:

  1. Prohibition on fake reviews:
    respondents demonstrated their support for the Consultation proposal to add certain fake review practices – for example, the buying and selling of fake reviews, and failing to take reasonable and proportionate steps to ensure reviews are genuine – to the list of banned unfair commercial practices at Schedule 19 of the DMCC Bill. Given the concerns that the growing prevalence of fake reviews could distort consumer purchase decisions, the government intends to action this proposal, however, these banned practices on fake reviews will be subject to civil liability only.

  2. Drip pricing: drip pricing is where a customer is shown an initial price for a product or service, and then additional fees are revealed (or "dripped") later during the checkout process. Respondents considered that the law should be strengthened to address both mandatory and optional dripped fees. The government confirmed its intention to prohibit companies from presenting a headline price which does not include any fixed mandatory fees, and companies will be required to disclose the existence of any variable mandatory fees and how they will be calculated. Optional fees, however, will not be included within these new measures at this stage.

  3. Private redress: the Consultation sought views on whether to extend the existing private rights of redress under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and DMCC Bill to circumstances where consumers have suffered detriment as the result of a misleading omission, a breach of professional diligence by a trader or banned practice in Schedule 19 of the DMCC Bill. While responses were broadly favourable, there was criticism that these rights are complex to understand and therefore unlikely to be used, and associated litigation would be prohibitively expensive. The government has consequently confirmed that it will continue to consider this issue further but that no action is proposed at this time.

What action should you consider?

With additional consumer rights of redress looming on the horizon, now is the time for retailers to take steps to address any problematic behaviours within their businesses and how they interact with consumers.

Retailers should consider the Consultation Response and carefully assess whether any of their activities may fall foul of the government's incoming legislative requirements. Additional guidance can be expected as the government partners with the CMA to assist impacted businesses to comply with their new obligations.

Explore Retail Compass Spring 2024

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