Consumer law | UK Regulatory Outlook July 2023

European Commission launches a new consultation on its fitness check of EU consumer law

The European Commission has launched a targeted survey in relation to its fitness check of EU consumer law on digital fairness. The survey is a follow up to the public consultation which closed in February. It is intended to collect more technical views relating to issues raised by the fitness check, and, therefore, is addressed to stakeholders who are familiar with EU consumer law and broader relevant legislation. It also illustrates how the EU's thinking is developing now the results of the public consultation have been reviewed. 

The survey seeks feedback on a range of issues related to new developments in the digital environment which affect consumers, including subscription service models (cancellation/automated renewal of subscriptions), artificial intelligence (AI), dark patterns, the growing role of data in advertising and marketing practices (personalised advertising), transparency and virtual/augmented reality.

The EU continues to be very concerned about dark patterns and subscriptions. AI appears to be an increasing focus with a new proposal about addressing the use of subliminal AI. This suggests that we can ultimately expect to see further amendments to the existing EU consumer directives (the Unfair Commercial Practices Directive, the Consumer Rights Directive and the Unfair Contract Terms Directive) to address some of these issues.

The survey also considers how the existing consumer laws and the proposed and upcoming new laws (for example, the Digital Services Act, Digital Markets Act, the proposal for an Artificial Intelligence Act and the Data Act) will interact.

The deadline for responses is 25 September 2023.

Updates on the EU Digital Services Act

Consultation on transparency database of content moderation decisions

The European Commission has recently consulted on transparency database of content moderation decisions under the EU Digital Services Act (DSA). The consultation ran until 17 July 2023.   

According to Article 24(5) of the DSA, online platforms are under an obligation to submit to the Commission their content moderation decisions (for example, removal of content, disabling access to it, demoting content, if it does not comply with the service's terms and conditions or is illegal) and the statement of reasons in relation to this without undue delay. The Commission should maintain a publicly accessible machine-readable database of such statements – and it has designed and prepared the respective DSA Transparency Database.

The Commission gathered feedback on the way this obligation should be implemented, namely: information to be collected, the methods for submission of statements of reasons, and the tools of access for the public.

Deadline for VLOPs and VLOSEs to comply with the rules

25 August marks the deadline for "very large online platforms" (VLOPs) and "very large online search engines" (VLOSEs) (as defined by the DSA), which were designated by the European Commission as such in April, to comply with the obligations set forth in the Act.

Implementing regulation adopted under the DSA

On 21 June 2023, the European Commission adopted the implementing regulation which provides practical details on arrangements under Article 83 of the DSA. This follows a consultation which closed on 16 March.    

These rules detail the following arrangements:

• the proceedings in accordance with Articles 69 (carrying out inspections at the premises of the providers of the VLOPs and VLOSEs) and 72 (monitoring the implementation of and compliance with the DSA by the VLOPs and VLOSEs carried out by the Commission);
• hearings provided for in Article 79 (namely, the requirement for the Commission to give the providers of the VLOPs or VLOSEs the right to be heard in case of adopting a decision for non-compliance); and
• the disclosure of information concerning proceedings provided for in Article 79.

Update on UK Digital Markets, Competition and Consumers Bill: CMA publishes its written evidence 

The Digital Markets, Competition and Consumers Bill completed the Committee stage in the House of Commons on 11 July 2023, and the amended version of the bill was published. It will now have a report stage and a third reading in the House of Commons.

In parallel, the UK Competition and Markets Authority (CMA) has published its written evidence to the Public Bill Committee's consultation on the bill. From the perspective of consumer protection, the CMA reiterated arguments that the current regime does not provide for sufficient level of confidence and protection to consumers from unfair practices. For example, the CMA currently cannot effectively stop businesses' illegal behaviour in this area as it has to go to court to establish the fact of a breach of consumer law.

The proposed rules under the bill would give the CMA wider powers to directly decide whether the consumer protection laws have been broken, and impose potentially substantial fines on the companies in breach. The CMA also believes that such decisions would provide practical guides for other businesses incentivising them to comply with the rules.

The CMA also highlights the importance of amendments to consumer law proposed by the bill, in particular relating to "subscription traps".

The authority is also supportive of the proposal to give the government the powers to amend the list of blacklisted offences by adding new ones.

CMA publishes results of its investigation into Emma Sleep's online sales practices

See Advertising and Marketing.

EU Digital Markets Act: potential gatekeepers notify the Commission  

Please see Competition.