The much-delayed subscription provisions in the Digital Markets, Competition and Consumers Act 2024 are expected to come into force in the spring of 2027. The Act gives consumers new rights to clear information before they sign up for a subscription, and to receive regular reminders, particularly before trials or contracts of 12 months or more auto-renew. Final government guidance is still awaited, following the outcome of its consultation earlier this year.

Given this timeline, many had expected that subscription contracts would not become the subject of enforcement action by the Competition and Markets Authority (CMA) before the new rules come into force. The Act also gave the CMA direct consumer enforcement powers, allowing it to decide for itself whether consumer law has been breached and to impose significant fines where it finds that it has. The CMA has already used these powers, including to enforce the Act's new provisions on price transparency and its ban on fake and misleading consumer reviews.

However, the CMA is not waiting for the new rules. It has recently launched an investigation into subscription contracts under the existing law.

Substance of the investigation

The CMA has launched its investigation following concerns that certain software customers may not have been given clear, upfront information about their subscription options at renewal, particularly where free access to new features had previously been given to the customer. The CMA is examining what information customers were given about their options as their subscription came to an end, and before they were automatically rolled onto a higher-priced plan that included the additional features.

The CMA's investigation runs in parallel with proceedings brought by the Australian Competition and Consumer Commission in the Federal Court, and with a separate investigation by the Italian Competition Authority.

Not waiting for the new rules

The CMA is able to investigate subscription contracts ahead of the new regime coming into force because general provisions already in force under the Act prohibit misleading actions or omissions. The CMA is looking into whether communications with customers before renewal were misleading and/or an aggressive practice, and its investigation will examine whether customers were given the key information they needed, including the difference in cost, to understand the options available to them before making a decision.

Why does this matter?

The CMA's investigation highlights the growing regulatory focus on commercial practices, including transparency around key information such as pricing and other material terms.

Although the UK's new subscription rules are not yet in force, businesses should ensure that consumers are given clear, timely and prominent information about their options before contracts renew or prices increase.

If you need our help to review your business practices, please contact us, or consult our Consumer Law Hub.