NEW CONSUMER PROTECTION LEGISLATION
Background
On 23 May 2024, Parliament passed the Digital Markets, Competition and Consumers (DMCC) Bill. This was as part of the ‘wash up’ process after news of the General Election and in the last hours before Parliament was dissolved. This new legislation is expected to come into force in the autumn. The DMCC represents the most significant reforms to consumer and competition laws in recent times.
The Act covers three areas:
- Digital Markets
- Merger controls and antitrust rules
- Consumer Law
The Act has repealed and reinstated some existing legislation, including the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). While most of the CPRs are mirrored in the new legislation, there are some updates. For example, Schedule 1 of the CPRs was a list of blacklisted practices – things that would always be considered as unfair. While most of these have been replicated in the new Act, some have been reframed to achieve wider application.
Consumer Protection
The DMCC also makes significant changes to consumer protection enforcement, giving new powers to the Competition and Markets Authority (CMA) to directly enforce consumer protection laws as well as breaches of any sanctions. These cases will no longer need to go through the courts. The CMA will be able to determine whether any business selling to UK consumers has breached consumer laws and levy significant fines. Those fines could be up to 10% of global turnover.
The CMA’s powers include being able to directly enforce consumer rules including on the use of unfair contract terms in consumer contracts (terms and conditions of sale) and unfair practices such as misleading customers or pressure selling.
Drip Pricing
The DMCC makes it explicitly clear that any invitation to purchase must set out the total price from the outset, including any fees, taxes or other charges. The price the customer first sees should be the price they pay. This is something that STAR has required of its members for many years now following work undertaken with the Committee of Advertising Practice in 2013. Failure to comply falls short of the transparency standards agreed by STAR members and could attract the attention of the CMA which, given their new powers, is to be avoided.
Secondary Ticketing
This issue was the principal one that had held up the Bill passing earlier, as the Government resisted amendments proposed in the Lords that were intended to help tackle ticket touting. The Lords gave way on pressing for these amendments to ensure the Bill passed before Parliamentary business stopped for the General Election. The amendments that did pass gave powers to the CMA to enforce existing regulations, particularly those on Secondary Ticketing in the Consumer Rights Act 2015.
What does this mean for ticketing businesses?
In advance of the Act coming into force later this year, businesses would be wise to review their terms and conditions to ensure they are not unfair. Unfortunately, the CMA does not publish a list of ‘fair’ terms, only those that are ‘black’ or ‘grey’. However, STAR’s Model Terms and Conditions address a number of key areas and were written some years ago in consultation with the CMA’s predecessor, The Office of Fair Trading, which had highlighted a number of unfair terms operating in ticketing.
Ticketing businesses should also check that they are not falling foul of the new regulations on Drip Pricing and that inclusive prices are given from the outset. We will work to encourage officials to consult with STAR when drafting guidance to the DMCC to ensure that any nuances are dealt with properly. One of these, for example, is how mandatory charges that are variable or ‘one off’ are dealt with when the total price is first given. In the meantime, the Committee of Advertising Practice’s help note on ticket pricing is a helpful resource on this, a link to which can be found on the STAR website (see links below).
On Secondary Ticketing, it is worth noting that the Labour party included the following in its manifesto:
Access to music, drama and sport has become difficult and expensive because of ticket touting. Labour will put fans back at the heart of events by introducing new consumer protections on ticket resales.
Given that action in this area may be low risk/cost and popular with the general public - 'an easy win' - it is therefore reasonable to expect that we might see something further on this quite early in the new Government’s tenure. The STAR Council has previously discussed its view on legislation and is broadly supportive, but keen to ensure that anything introduced takes proper account of necessary detail so that it can be truly workable, enforceable and effective in reducing consumer harm. We will work to make STAR's views and advice known to the relevant departments and politicians, coordinating with other industry bodies where appropriate.
Links
