What the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) means for your online Ts&Cs: new rules for online subscriptions and contracts

The Digital Markets, Competition and Consumers Act 2024 (DMCC Act) sets out a new regime to increase competition in digital markets and strengthen consumer rights. Among its key reforms are the new requirements for online subscription agreements and the expanded enforcement powers of the Competition and Markets Authority (CMA).

These changes will significantly affect how traders design and present their online terms and conditions (Ts&Cs), particularly where subscription contracts and automatic renewals are concerned. The DMCC Act introduces new transparency and information obligations, stronger cancellation rights for consumers, and new duties on traders to issue reminders and notices.

This article considers key aspects of the DMCC Act in relation to (i) the new legal requirements for digital contracts, and (ii) the CMA enforcement and practical impact for online Ts&Cs.

New legal requirements for digital contracts under the DMCC Act

a) Pre-contract transparency and information obligations

The new regime sets out pre-contract transparency and information requirements which replace (but are generally the same as) the obligations under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134).

In summary, prior to (or as close intime to entering into the contract as is practicable) entering into a subscription contract with a consumer online, the trader will be required to provide to the consumer the key pre-contract information and full pre-contract information, as detailed below.

At this pre-contract stage, traders must:

Provide key pre-contract information, separately from the full contract terms, and which is presented clearly, in writing and such that no additional steps are required of the consumer to access the information beyond those needed to enter into the contract;
Provide all full pre-contract information including (i) any restrictions on delivery and (ii) acceptable payment methods, again in writing and without additional steps for the consumer to access it.
Ensure that the final contracting step requires the consumer to give an express acknowledgement of any payment obligation.

At and immediately after contract formation the trader must confirm the subscription details to the consumer on a durable medium (such as email).

During the contract, traders must:

Send renewal reminders to consumers at specific intervals (see more detail below) and in the form required by law;
Provide statutory cooling off rights to consumers not only at contract entry, but also at the end of any introductory period and on any contractual renewal for 12 months or more, and notify consumers of such rights;
Offer simplified cancellation and termination mechanisms; and
Provide an "end of contract notice" to consumers when the contract terminates.

b) Subscription contracts and automatic renewals

Under section 254 of the DMCC Act, a “subscription contract” is defined broadly as a contract between a trader and a consumer for the supply of goods, services or digital content in exchange for payment, where the contract has the effect of:

Standard paid subscriptions:
- providing an automatically recurring or continuing supply, for a fixed or an indefinite period;
- imposing automatic payment liability on the consumer; and
- giving the consumer a right to terminate the contract.
Free or at reduced rate introductory subscriptions for a specified period:
- converting into a liability for payment (or for payment at a higher rate), after the introductory period ends; and
- giving the consumer a right to terminate the contract before such liability is incurred.

These provisions are intended to tackle subscription traps and ensure consumers are not locked in without clear notice. To address these practices, traders will be required to send renewal reminders to consumers at specific frequencies, with specific content, presentation and timing as set out in the pre-contract information. These include:

Where there is an initial free or reduced rate for a specified period: a reminder must be sent before the consumer first becomes liable to pay.
Where renewal payments fall due every six months or more frequently: a reminder must be sent before the last renewal payment due prior the expiry of each such period.
Where renewal payments fall due less frequently than every six months, a reminder must be sent before each renewal payment.

CMA enforcement and practical impact for online T&Cs

Under the DMCC Act, there are two parallel enforcement regimes:

a court-based regime, which from 6 April 2025 replaces, simplifies and enhances the existing regime under Part 8 of the Enterprise Act 2002; and
a new direct enforcement regime, which gives the CMA the power to act without going to court.

The CMA may still choose to pursue matters before the courts where[1]:

the consumer protection law at issue is outside the scope of the CMA’s direct enforcement regime, but the CMA determines to take action through the courts in respect of suspected breaches of that legislation;
where formal court procedures are needed to prohibit or prevent a practice; or
where it is in the public interest to bring a criminal prosecution.

a) Regulatory Enforcement by the CMA

From 6 April 2025, where the CMA has reasonable grounds for suspecting that (i) a trader has engaged, is engaging, or is likely to engage, in an infringing commercial practice that constitutes a relevant infringement under the DMCC Act, or (ii) a trader is an accessory to it (in that the person is a controller of the body corporate or a director, manager, secretary or other similar officer of the body corporate or a person purporting to act in such capacity to such a practice), the CMA may take direct enforcement action. Its new powers include the power to:

Issue a provisional infringement notice (PIN), requiring a trader to stop or not to continue or repeat the infringing practice.
Issue a final infringement notice (FIN) imposing binding requirements on the trader.
Include enhanced consumer measures in a PIN or FIN which can be redress (including compensation), compliance (measures intended to reduce or prevent the risk of breach reoccurring) or choice measures (enabling the consumer to choose more effectively between traders).
Issue an online interface notice (OIN) requiring a trader to remove or restrict content from an online interface, to disable or restrict access to an online interface, or display a warning to consumers accessing an online interface.
Accept undertakings from a trader (instead of issuing a FIN or an OIN).
Impose civil penalties of up to the higher of (a) £300,000 or (b) the 10% of the trader’s global turnover for:
- non-compliance with a FIN, an OIN or an undertaking;
- an ongoing breach of enforcement directions;
- providing misleading or false information;
- and liability may be extended to other members of the trader’s group, including future group members.
Make an application to the court to enforce a CMA direction.
Require the trader to provide evidence substantiating any factual claim made in their commercial practice.

b) Practical Implications and guidance

The DMCC Act became law on 24 May 2024, but many of its consumer protection provisions will only take effect once secondary legislation is made. The new subscription rules are not expected to apply until spring 2026. Although the regime is not fully in force yet, traders should begin preparations now, and should:

Assess scope: determine whether existing online contract arrangements fall within the DMCC Act’s definition of a subscription contract, or whether an exclusion applies.
Review disclosures: check that all pre-contract information, presentation requirements and acknowledgement processes meet the new standards.
Update processes: ensure that reminder notices of renewals, cancellation and termination rights, and cooling-off rights are built into systems and workflows.
Plan consumer communications: prepare compliant templates for renewal reminders, termination confirmations, and end-of-contract notices.
Embed governance: update policies and train teams to reflect the CMA’s enhanced enforcement powers and the risk of significant turnover-based penalties.

Comments

The DMCC Act represents a major shift in consumer protection for online subscription models. With stricter requirements on transparency, cancellation, and renewal processes, combined with the CMA’s significantly enhanced enforcement powers, businesses face both legal and reputational risks if they do not prepare. Early action will allow businesses to test and implement changes to their online Ts&Cs in good time, minimising legal and reputational risk when the new regime comes into effect.