The new Digital Markets Competition and Consumers Act came into force on 1 January 2025, bringing in a raft of changes to competition law for organisations in the UK. In this series we’ll be looking at key sections of the Act, and what this means in practice for businesses and charities.  

It might not be an obvious spot, but the Digital Markets, Competition and Consumers Act 2024 (DMCC) means significant changes to subscription-model income for both commercial and not-for-profit businesses including the charitable sector. The overall thrust of the DMCC is enhanced consumer protection and more enforcement powers to the Competition and Markets Authority (CMA).

See our easy to digest Q&A below for more information.

What is the new subscription regime?

The new regime applies to subscription contracts (where contracts can automatically renew for a fixed or indefinite period). It introduces mandatory increased transparency and notification requirements so that consumers are more aware what the key terms of their subscription are (before entering into a contract/agreement) and reminds them of their ability to cancel a contract during a cooling-off period and beyond. There are also new rules for how subscriptions are renewed. The CMA also sees its consumer enforcement powers brought into line with its stringent competition law powers. Detailed regulations on how a consumer can give notice to cancel, how to return unwanted goods and how refunds are to be paid/apportioned if goods and services have been used during the cooling-off period (to name a few) will be published following Government consultation*.

What type of organisation does it affect?

The new subscription regime will affect any organisation offering goods or services in exchange for regular, auto-renewing payments. There are over 150 million subscription contracts in the UK covering many sectors. We give here just some examples of organisations which will be caught: an organic food, beverage or beauty box supplier with weekly deliveries to its customers; a local leisure centre with monthly gym membership; a culture and heritage organisation with annual membership; and magazine publishers (digital and in print).

So, it’s only organisations selling goods, services, and digital content?

Yes. However, some organisations could be inadvertently caught where they do not consider themselves to be ‘selling’ anything. Charities who offer a quarterly update newsletter to a repeat donor (paper or digital) or an annual ‘thank you for donating’ gift might also need to comply depending on the specific facts. Other organisations who do not consider themselves to be ‘traders’ in the commercial sense (such as a representative body with annual fees) could also be caught.

What happens if you don’t comply?

As well as giving consumers the right to cancel (with little comeback by the supplying organisation where there is a serious breach), the new penalties for non-compliance bring consumer law into line with competition law – that means fines issued directly by the CMA (with no need for a court order) of up to 10% of worldwide turnover. Plus, the reputational fallout from non-compliance should never be underestimated.

When does the regime come into force?

The DMCC is a huge piece of legislation and various parts are being introduced at different times (e.g. the main public focus of the DMCC – the digital markets regime – is live now). The reforms to subscription contracts are not due until spring 2026. Whilst that might seem like a way off, there could be a lot to do to an existing subscription model before it is compliant. Affected organisations should start to prepare now by reviewing and updating their template documents and procedures. The changes required could involve significant time and resources (likely human and non-human) depending on the current subscription model.

How can we help you?

Do get in touch if you’d like to understand the implications for your organisation and any (new) legal requirements you should be preparing for. We are advising both commercial and non-commercial entities (including charities, not-for-profit, and membership organisations) on the new subscription regime. We will be monitoring legal developments and writing further updates throughout the year.

*The Government consultation runs until 10 February 2025 (see here if you’re interested Consultation on the implementation of the new subscription contracts regime (web accessible version) – GOV.UK).

Read the second article in this series – Too good to be true? New legislation cracks down on fake consumer reviews.