The Digital Markets, Competition and Consumers Act 2024: Consumer protection issues for the life sciences sector

The Digital Markets, Competition and Consumers Act 2024 (the DMCC Act) was finalised on 24 May 2024, and is expected to start coming into force in October 2024. You can read a summary here. The new law covers various areas, including the regulation of digital markets, competition law and merger control. It also impacts UK consumer protection law in ways that are likely to affect businesses that provide goods, services and/or digital content to consumers. Some of the key consumer protection issues likely to impact life sciences businesses are set out below.

Subscription contracts

One of the main areas of focus is “subscription traps”. This is a subscription-type contract where a consumer may find it difficult to extricate themselves from their contract. This could apply, for example, before a consumer is required to pay (or pay more) after an initial free or discounted price period, or where the contract automatically renews after a period of time.

In the life sciences sector, subscription contracts may be used in relation to consumer apps, for example in relation to continuous glucose monitoring or reproductive cycles. They may also be relevant for repeat ordering of health-related products. Not all of these subscriptions will be covered by the changes, however. Many, but not all, health-related products and services are specifically excluded, notably those that are provided under prescription by a healthcare professional, and some medical devices. The first task, therefore, will be to establish whether specific subscription is caught by the new DMCC Act obligations.

Where subscription-based products and services are covered by consumer contracts outside the exclusion, they are likely to be affected to at least some degree.

The DMCC Act sets out new requirements for these contracts:

• Pre-contract information – certain “key” information must be provided in the UI and importantly mustn't be behind a tooltip or require the consumer to click or take any other action to access it, which will be particularly challenging for mobile and other space limited UIs.
• Renewal reminders – these are to be sent to the subscriber before the auto-renewal of a subscription or the end of a free/discounted period, and at certain other intervals depending on the length of the contract. This reminder will need to inform consumers that the subscription is ongoing, give certain details of payments due and alert them to their cancelation rights. It can be provided as part of another communication (rather than sent separately) provided that the relevant information is “more prominent” than the other content.
• Cancellation method(s) – subscribers must be given a “straightforward” way of cancelling their subscription. Currently, there's no specific requirement or further guidance as to how this might be done, although something like a cancel button on the relevant page of the business’s website (as is required in Germany and, more recently, France) may meet these requirements. This could provide a pan-European solution for businesses operating in these jurisdictions. However, the DMCC Act goes further and says that subscribers are also entitled to cancel using other methods provided they make a “clear statement” to this effect which means that businesses will need to be prepared to receive and implement cancellation requests through other means for example if a consumer contacts customer services.
• Cooling-off periods – in addition to the existing  initial 14-day cooling off period for online contracts (which will continue to apply), consumers will now get a similar right to cancel following the end of any free/reduced price introductory period and upon auto-renewal.

Failure to comply these requirements will allow the consumer to cancel their subscription with immediate effect, at no cost to them. There's also a specific offence of failure to provide certain information.

The current plan is that the implementation of the subscription regime will be delayed until spring 2026, giving businesses at least some time to prepare for these changes and consider how they may impact the consumer journey.

Drip pricing

This is an example of a “dark pattern”, where consumers are manipulated or “nudged” into doing things or making choices that may not be in their best interests. “Drip pricing” involves the idea of feeding additional fees and charges into the booking price that weren't included in the initial price advertised to consumers, but with the consumer feeling committed to the purchase by the point these extra amounts are introduced. This practice can see consumers incurring costs that they may not have been willing to accept had they been clear from the outset.  

Under the DMCC Act certain information must be provided to consumers whenever an “invitation to purchase” is made (broadly any advertising of the product/service which includes the price), including:

• The requirement to provide a “total” price, which includes any fees/taxes/charges and other payments that the consumer will have to pay when purchasing the product
• The existence of any other mandatory but variable fees, and how these are calculated

It won't catch genuinely optional charges (other than freight, delivery or postal charges, which must be specified), though there is scope for further regulation in this area for fees that are presented as optional when, in fact, they are likely to be unavoidable for most consumers.

Fake Reviews

The DMCC introduces new so-called blacklisted offences related to fake reviews.

Of particular relevance to businesses that host customer reviews on their website, the DMCC Act will prohibit:

• Publishing consumer reviews, or information deriving from/influenced by consumer reviews, in a misleading way, eg only publishing positive reviews, or selecting choice parts of the review which are not representative of the whole
• Publishing such fake/misleading reviews/review information from others without taking “reasonable and proportionate” steps to identify and/or remove them

In practice this means that businesses that host reviews on websites and elsewhere will need to set up processes to perform “reasonable and proportionate checks” to establish if reviews are genuinely submitted by consumers who have had experience of the product or service concerned.  Where there's doubt reviews will need to be removed. 

Further use of reviews on websites and moderation policies will need to be reviewed to ensure they do not inadvertently mislead for example by only publishing positive reviews. This will include where reviews are used to drive ranking or other products of products and services on a website. Currently there is significant scope for uncertainty about what “reasonable and proportionate” checks means. The Competition and Markets Authority (CMA) is expected to consult on and produce further guidance and clarification, including what steps traders will be expected to take to comply with these requirements.

Enforcement

The DMCC Act introduces new enforcement powers for the CMA, allowing it to determine directly whether the legislation has been breached without court involvement. Failure to comply can ultimately lead to substantial fines, up to £300,000 or 10% of global turnover, whichever is the higher, with fines of up to £300,000 for individuals also found to be “accessories” to an offence. Businesses likely to be caught by the DMCC Act will therefore need to be aware of and understand their obligations,  and ensure that their customer journey is compliant.