The UK Department for Business and Trade's (DBT) response to a consultation launched in September 2023 results in further proposed changes to the Digital Markets, Competition and Consumers Bill (DMCC)and wider UK consumer law.
The consultation garnered over 350 responses from businesses, industry bodies, enforcement bodies, and consumers on a variety of topics, including fake online reviews, displays of pricing information, and so-called drip pricing.
It's difficult to argue that fake online reviews don't at least partly persuade consumers to commit to a purchase. Perhaps that's why over 80% of respondents agreed with the DBT's suggestion to explicitly prohibit:
- submitting a fake review, or incentivising another to submit a fake review
- offering or advertising to submit or facilitate a fake review
- misrepresenting reviews, or publishing reviews without taking reasonable and proportionate steps to prevent consumers from coming across fake reviews
These new prohibitions are due to be inserted into schedule 19 of the DMCC – a schedule which bans certain commercial practices, replacing a similar schedule in the existing Consumer Protection from Unfair Trading Regulations (2008). Unlike many of those banned practices however, those relating to fake reviews won't constitute a criminal offence but will be subject to civil liability.
The DBT's planned guidance, via the Competition and Markets Authority, as to what amounts to "reasonable and proportionate steps" will be key in interpreting the extent of a platform provider's obligations.
Drip pricing is the act of setting a headline price for a product or service, to then slowly "drip" additional charges – whether mandatory or optional - as the transaction moves forward.
Following strong approval from consumer and consumer group respondents, the DBT is planning to specifically prohibit presenting a headline price which does not:
- include any fixed mandatory charges that must be paid; and
- feature alongside it a disclosure of any variable mandatory fees and how they will be calculated.
That a general requirement already exists in this area – one which is going to be restated in the DMCC – was something highlighted by respondents that didn't necessarily agree with the DBT's proposed changes. They also pointed out that too much information at the outset isn't always what the consumer wants, and transactions through apps - on mobile phones or digital head units in cars – could lead to practical limitations on how much information can be provided to the consumer upfront.
Those in industries where additional fees throughout the customer journey are commonplace – such as the airline, food delivery, and car rental industries – should continue keep a close eye. Particularly as the DBT has promised to give further consideration to the practice of "optional" dripped fees, which could lead to further guidance and/or legislation relating to how and when those optional fees are presented to the consumer.
Pricing displays and price transparency
Many of the rules retailers need to follow when displaying pricing information are contained in the Price Marking Order 2004 (PMO). The PMO is retained EU law and following the consultation is in line for some key amendments:
- The unit pricing method is an existing requirement for retailers – other than "small-shops" - to display a unit price (i.e. per loo roll, per liquitab, or per litre) alongside the final selling price, making it easier for the consumer to compare pricing. The DBT proposes amendments to the rule to make it "consistent", by removing exceptions which allow similar products to be unit-priced or measured differently, and to explicitly require unit pricing on promotional products where practical to do so.
- The PMO requires pricing to be displayed in a way that is "unambiguous, easily identifiable, and clearly legible", but respondents felt pricing displays suffered from small font, clutter, and "loyalty-prices" serving as a distraction from "normal" prices. It wouldn't be surprising if the wider trend of super-low loyalty prices received attention soon, but for now the government is going to work with retailers and enforcement bodies to set out clearer legibility criteria – whether that's by way of guidance or legislation remains to be seen.
- The pricing elements of the proposed Deposit Return Scheme (DRS), where consumers are charged an upfront deposit on drink products that can be redeemed on the container being returned to a designated return point, will also be addressed. Respondents largely agreed that the deposit amount will need to be displayed separately to the selling price and shouldn't be factored into the unit price calculation.
The DBT intends to publish the technical detail of the proposed amendments to the PMO in spring 2024.
Watch this space
The DBT reserved judgment on several other important areas of the DMCC, including the "professional diligence" requirement, the list of banned commercial practices in Schedule 19, and consumer remedies for noncompliance.
In the meantime, consumer facing organisations should keenly await the draft legislative amendments that will capture the DBT's firm proposals. Those that operate in both the UK and the EU also need to consider the best method of implementing differing consumer protection requirements across two markets whose regulatory landscape continues to drift apart.