February 1, 2024
In September 2023, the Government consulted on certain aspects of consumer law with a view to ensuring the UK has the right consumer laws in place post Brexit as well as to ensure that the Digital Markets, Competition and Consumer Bill (“DMCC“), currently passing through Parliament (previously reported by Wiggin), adequately addresses these particular issues. On 24 January 2024, the Government published a summary of the responses received and the Government’s response to the views heard including its proposed new policy interventions, a summary of the key aspects of which is set out below.
The UK Price Marking Order 2004 (“PMO”) requires traders to display the selling price and, where appropriate, the unit price of products (the price for a metric unit of the product, e.g. kilogram or litre) for products sold from bulk. The consultation highlighted concerns as to how these requirements apply to promotions, such as volume pricing (e.g. multibuy discounts) or loyalty pricing (e.g. lower prices for customers who are members of the trader’s reward scheme). The Government has concluded that it will amend the PMO to ensure the use of consistent measures for unit pricing, it will introduce clear legibility criteria for instore price labels (either by legislation or guidance) and it will amend the PMO to require unit pricing for most types of promotion, carrying out further work to define exactly which types of promotional or loyalty scheme offers should be included within the PMO’s scope.
On its proposal to introduce a deposit return scheme, under which customers will pay an additional deposit when purchasing single-use drinks containers which is then returned when the container is recycled, the Government has concluded that it will amend the PMO to require the cost of the deposit to be displayed separately on price labels.
The consultation highlighted concerns over drip pricing, a common strategy used by online traders, when consumers are shown an initial price for a product (“base price”) but additional fees (e.g. delivery or booking fees) are shown only as consumers proceed along the payment process. The Government proposes to add provisions to the DMCC Bill to prohibit presenting a headline price which does not incorporate any fixed mandatory fees (i.e. fees that all customers must pay, e.g. insurance for car hire) or does not disclose the existence of any variable mandatory fees (e.g. mileage fees for car rental), alongside the headline price, and how they will be calculated. The Government will continue to consider whether any further steps are needed to address optional dripped fees (e.g. airline seat selection).
The consultation also highlighted concerns over the prevalence of fake reviews in online shopping and the Government has concluded that a number of commercial practices relating to fake reviews will be added to the list of commercial practices that are considered unfair in all circumstances under the Consumer Protection from Unfair Trading Regulations 2008 (which are largely being restated in the DMCC Bill), making them subject to civil, rather than criminal, liability. The Government will also work on guidance to explain this new law.
The consultation addressed the applicability of consumer law to online platforms, raising concerns in relation to fake reviews, sale of dangerous, illegal or counterfeit products, manipulation of consumer decision-making (e.g. drip pricing and subscription traps) and fraud. Many respondents to the consultation highlighted the need for there to be greater clarity around the DMCC Bill’s requirement for traders to act with professional diligence in relation to consumer transactions on online platforms, suggesting that there should be clarification of what this means in practice. The Government concludes that a number of the concerns raised have already been addressed by the Government: drip pricing and fake reviews in this paper, subscription traps in the DMCC Bill, unsafe products in the Government’s Product Safety Review, and fraud in the Online Safety Act 2023. However, it will consult on whether any further guidance for online platforms is needed, including whether such guidance should be mandatory.
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