As the provisions of the Digital Markets, Competition and Consumers Act 2024 begin to take effect, it is crucial for businesses to stay informed and compliant, writes Judith Turner, group deputy chief ombudsman at the Furniture & Home Improvement Ombudsman (FHIO) …
The Digital Markets, Competition and Consumers Act 2024 introduces significant changes to tackle unfair commercial practices. It strengthens protections against misleading and aggressive tactics, refining definitions and enforcement mechanisms. These changes enhance consumer rights and increase business accountability in a rapidly evolving market.
This important piece of consumer protection legislation is being viewed as an opportunity for traders to look again at the consumer journey in order to avoid detriment and promote best practice. Some key changes include:
* Unfair Commercial Practices will encompass the entire consumer journey, and traders need to be aware that the definitions are widely drawn. A transactional decision, for example, can include motivating a consumer to simply pick up the phone to ask for more information, and as soon as information about the price and main characteristics of the product are published, there is the potential for a range of other information to be considered to be ‘key’, mandating that it is made available at the same time in order to ensure compliance. This is likely to be one of the biggest challenges for traders, who will need to make sure consumers have the right information at the right time.
* A commercial practice will include an action which affects a consumer, so that a manufacturer who labels goods will be included within the remit of the new legislation.
* Even greater emphasis than before is given the information and the way in which this is presented to ensure it is clear and meets the requirements of honest market practice and good faith. It is very clear that information does not have to be false for it to be misleading.
* The Competition and Markets Authority (CMA) now has direct enforcement powers and can impose fines of up to 10% of global turnover (or £300,000 if higher) for serious breaches. There are also monetary penalties for not engaging with Trading Standards’ information notices.
* The unfair commercial banned-practices list is updated from 31 to 32 in number to include fake reviews. The list can be further updated, and the CMA is pushing for greenwashing to be added.
* The legislation adopts a principles-based approach, which means that traders need to ‘show their working’, audit their commercial practices and ensure they comply at each stage in the consumer journey.
* Alternative Dispute Resolution (ADR) involving consumers can only be provided by ADR bodies who are authorised to do so, making it even more important that traders offer ADR via trusted means, such as an ombudsman.
The Furniture & Home Improvement Ombudsman (FHIO) is providing a series of webinars and helpful blogs to ensure traders can understand how these changes apply to them and enable them to meet their requirements.
Regardless of to whom a trader targets its promotions and who buys its products, traders need to be aware of their obligations so that they can comply with consumer protection laws. This means that commercial practices should be fair and backed up by effective, legitimate and robust Alternative Dispute Resolution (ADR), thereby ensuring the highest levels of consumer protection and confidence.
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