Consumer law | UK Regulatory Outlook February 2024

UK government publishes response to its consultation on proposed changes to consumer law

The UK government has published its response to the Department of Business and Trade consultation on "Improving Consumer Price Transparency and Product Information for Consumers". See our Insight for background.

Based on the outcome of the consultation, the government announced that it will:

• Add fake reviews to the list of blacklisted commercial practices (civil liability only).
• Make platforms accountable for performing "reasonable and proportionate" steps to ensure reviews published on their pages are genuine. The government will work with the Competition and Markets Authority (CMA) on guidance setting out what "reasonable and proportionate" steps traders would be expected to take to remove, and prevent consumers from seeing, fake reviews. The CMA intends to consult on this guidance before it is finalised and published.
• Clarify the law on drip pricing by requiring that unavoidable ("mandatory") fees be included in the headline price or indicated at the start of the purchasing process. Variable mandatory fees will have to be included alongside the headline price together with information on how they will be calculated. The government has said that, at present, it does not intend to legislate for similar measures on optional fees.
• Undertake further stakeholder engagement on what consumer law obligations platforms should have to comply with, and how that should be publicly set out.
• Amend the Price Marking Order 2004 (PMO) and associated guidance. The proposed changes to the PMO include: (i) making mandatory the consistent use of unit pricing measures (which means eliminating current exemptions, so for example, all products sold by weight would have a price per kilogram); (ii) in light of the Deposit Return Scheme, to exclude the deposit from the selling price displayed, and make the deposit clearly displayed separately; the unit price would be calculated excluding the deposit. The government also aims to work with industry and enforcement bodies to improve legibility of price labels, for example, by setting out minimum font sizes for prices.
• Extend the power to make applications to the court for online interface and interim online orders to all public designated enforcers as listed in Part 3 of the UK Digital Markets, Competition and Consumers Bill (DMCC Bill). Such regulators include. among others. the Financial Conduct Authority, the Information Commissioner, Ofcom and the Secretary of State.

Additionally, the government confirmed that it will not be adding misleading environmental practices (greenwashing) to the list of banned practices as such actions are already against the law. However, it intends to work further with the CMA on this.

The DMCC Bill completed the committee stage in the House of Lords on 7 February 2024. Following a third reading in the House of Lords, the bill will return to the House of Commons where the Lords' amendments will be considered.

Provisional agreement reached on the right to repair

The European Parliament and the Council of the European Union have reached a provisional agreement on the right to repair directive. See this Regulatory Outlook for background.

Key consumer-related aspects in the directive include:

• Consumers would be provided with an opportunity to borrow a product while their own one is being repaired, or have an option to choose a refurbished unit as an alternative.
• The legal guarantee would be extended to an additional one-year for repaired goods.
• Each Member State would need to introduce at least one measure to promote repair.
• Consumers will have free online access to repair services at EU level as well as in each Member State.
• Consumers should be informed about a manufacturer's duty to repair.

These changes are in addition to the (already agreed in principle) proposals to amend consumers' statutory rights, such as that repair be prioritised over replacement. For the products angle of the directive proposal, which includes manufacturer obligations and spare part requirements, please see the Products section.

EU DSA applicable to all online intermediaries in the EU

Since 17 February 2024, the EU Digital Services Act (DSA) became applicable to all online intermediaries in the EU. See our Insight covering what the DSA is, to whom it applies, and what affected companies can expect.

UK government's response to report on risks to sport and culture of NFTs and blockchain

The Culture, Media and Sport Committee has published the UK government's response to the committee's report on the risks to sport and culture of non-fungible tokens (NFTs) and the blockchain. See this Regulatory Outlook for more information about the report.

In its response, the government rejects the committee's recommendation for a code of conduct for online marketplaces, including NFT marketplaces, to protect copyright owners and consumers. In the government's view, the law which regulates the liability of online marketplaces and other intermediaries (the "safe harbour" provisions) already provides sufficient protection against IP infringement, although it says it will "monitor developments".

As for protecting consumers from harm in respect of the advertising and marketing of NFTs, and the committee's recommendation that any advertising regime should compel the whole of the advertising supply chain to take steps to mitigate those risks, the government emphasises that the Online Advertising Programme will have a targeted focus on tackling illegal advertising. It intends to introduce a new regulatory framework to address scam and fraudulent advertising, including in relation to NFTs. The government also notes the work of the Online Advertising Taskforce in relation to illegal advertising, the role of the Online Safety Act 2023 in addressing fraudulent ads and the introduction of new legislation bringing financial promotions of qualifying cryptoassets into the existing regulatory regime for financial promotions administered by the Financial Conduct Authority.

CMA announces review of loyalty pricing in supermarkets

The CMA has announced the launch of its review of loyalty pricing by supermarkets, which complements the CMA's work on tackling cost of living pressures in the groceries sector.

The CMA aims to assess whether:

• loyalty pricing is able to mislead consumers, such as whether loyalty pricing is a genuine promotion or as good a deal as presented;
• any groups of consumers are at a disadvantage as a result of loyalty pricing;
• loyalty pricing has any impact on consumer behaviour and competition among supermarkets.

The CMA expects to provide an update on its work in July 2024, and to complete the review by the end of the year.

Directive to empower consumers for the green transition: EU Parliament and Council formally adopt their positions

See Advertising and Marketing.

EU Commission publishes the outcome of its influencer marketing "sweep"

See Advertising and Marketing.