4:17 am - April 29, 2025
Publishers are among many sectors that will be affected by upcoming regulations governing subscription contracts.
The UK government is seeking input from businesses regarding new regulations that will govern subscription contracts, emphasising the importance of consumer protection in the ever-evolving digital landscape. The consultation is part of the broader Digital Markets, Competition and Consumers Act 2024 (DMCCA), which aims to address issues related to automatic and recurring payments for goods, services, or digital content.
According to a recent impact assessment from the UK government, about 155 million active subscriptions exist in non-regulated sectors across the UK, with consumer spending reaching around £26 billion annually. However, a significant number of these subscriptions are perceived as unwanted, with roughly 9.7 million contracts identified as such. Many consumers have reported difficulties in exiting subscription agreements, particularly after initial promotional deals have ended, leading to potential compulsory rollovers at increased prices.
Under the new DMCCA framework, which received royal assent in May 2024, subscriptions will be subject to more stringent regulations compared to those outlined in the existing Consumer Contracts Regulations. Among the critical changes are requirements for businesses to provide comprehensive pre-contract information. This information must include essential details like the duration of initial contracts, payment schedules and clear procedures for cancelling subscriptions. Notably, the new regime mandates timely reminder notices regarding contract renewals and clear instructions on ending contracts during cooling-off periods.
To facilitate the implementation of these rules, the Department of Business and Trade (DBT) has launched a consultation process which will end on 10 February 2025. This initiative offers businesses a chance to share their perspectives on topics such as cancellation rights, remedies for breaches and the stipulations of pre-contract information. Importantly, the consultation aims to clarify rules concerning refunds during the cooling-off period, particularly highlighting that any refunds for services must be prorated based on the duration of service received.
With the projected rollout of these subscription contracts rules in spring 2026, businesses have limited time to adapt their operations to align with the upcoming regulations. Implementing new guidelines will likely require adjustments in how subscription contracts are communicated and managed, ensuring compliance with consumer protection measures.
As businesses prepare for the changes, concerns have been raised regarding the potential administrative burdens associated with increased consumer communications. Many companies have indicated fears that the new information mandates could lead to confusion or overwhelming saturation for consumers, especially when subscription charges are modest. The government’s analysis highlights that many consumers struggle to understand online terms, with estimates suggesting that three-quarters do not engage with these terms before finalising a contract.
The DMCCA’s regulations are designed to foster a more consumer-friendly environment, balancing the need for businesses to inform their customers adequately while maintaining a clear, coherent line of communication. Stakeholders have expressed worries over the prospect of overlapping obligations for companies regulated by entities like Ofcom or the FCA, potentially leading to consumers receiving multiple and potentially conflicting sets of information regarding their subscriptions.
Source: Noah Wire Services
- https://www.cliffordchance.com/insights/resources/blogs/antitrust-fdi-insights/2024/11/new-uk-consumer-protection-rules-for-subscription-contracts-uk-government-consultation.html – Corroborates the new UK consumer protection rules for subscription contracts, the consultation process, and the changes under the Digital Markets, Competition and Consumers Act 2024.
- https://www.rpclegal.com/thinking/tech/digital-markets-competition-and-consumers-act-becomes-law/ – Provides details on the Digital Markets, Competition and Consumers Act (DMCC) receiving royal assent, its key points, and the reforms it introduces to competition, consumer, and digital markets regimes.
- https://www.rpclegal.com/thinking/tech/digital-markets-competition-and-consumers-act-becomes-law/ – Supports the information on the DMCC Act’s impact on consumer protection, including the CMA’s new powers and the changes to consumer law.
- https://www.squirepattonboggs.com/-/media/files/insights/publications/2024/06/the-uks-new-digital-markets-competition-and-consumers-act/the-uks-new-digital-markets-competition-and-consumers-act.pdf?rev=aefe779d0e5c47a6bbe3247e662625e9 – Details the sweeping reforms introduced by the DMCC Act, including new regulatory regimes for digital markets, enhanced competition enforcement powers, and refinements to consumer protection rules.
- https://www.squirepattonboggs.com/-/media/files/insights/publications/2024/06/the-uks-new-digital-markets-competition-and-consumers-act/the-uks-new-digital-markets-competition-and-consumers-act.pdf?rev=aefe779d0e5c47a6bbe3247e662625e9 – Explains the new enforcement regime for UK consumer protection rules and the increased regulatory scrutiny businesses will face.
- https://www.cliffordchance.com/insights/resources/blogs/antitrust-fdi-insights/2024/11/new-uk-consumer-protection-rules-for-subscription-contracts-uk-government-consultation.html – Discusses the specific requirements for businesses to provide comprehensive pre-contract information, including contract duration, payment schedules, and cancellation procedures.
- https://www.rpclegal.com/thinking/tech/digital-markets-competition-and-consumers-act-becomes-law/ – Mentions the CMA’s new powers and the consultation process related to the new digital markets regime, which is part of the broader DMCC Act.
- https://www.squirepattonboggs.com/-/media/files/insights/publications/2024/06/the-uks-new-digital-markets-competition-and-consumers-act/the-uks-new-digital-markets-competition-and-consumers-act.pdf?rev=aefe779d0e5c47a6bbe3247e662625e9 – Highlights the need for businesses to prepare for the new regulations, including adjustments in communication and management of subscription contracts.
- https://www.cliffordchance.com/insights/resources/blogs/antitrust-fdi-insights/2024/11/new-uk-consumer-protection-rules-for-subscription-contracts-uk-government-consultation.html – Addresses the concerns about administrative burdens and consumer confusion due to the new information mandates.
- https://www.rpclegal.com/thinking/tech/digital-markets-competition-and-consumers-act-becomes-law/ – Discusses the potential overlapping obligations for companies regulated by multiple entities and the need for clear communication to avoid consumer confusion.
- https://www.squirepattonboggs.com/-/media/files/insights/publications/2024/06/the-uks-new-digital-markets-competition-and-consumers-act/the-uks-new-digital-markets-competition-and-consumers-act.pdf?rev=aefe779d0e5c47a6bbe3247e662625e9 – Emphasizes the importance of businesses proactively assessing and refining their customer engagement strategies to comply with the new regulations.
Register for Editor’s picks
Stay ahead of the curve with our Editor's picks newsletter – your weekly insight into the trends, challenges, and innovations driving the future of digital media.
