Misleading advertising and unfair commercial practices
What’s changed?
The DMCC introduces new prohibitions on misleading advertising with serious consequences for non-compliance. This includes a wide array of unfair commercial practices replacing the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs).
The offences capture marketing which leads to a consumer to do or not to do something. This could be as simple as the decision to visit a shop or click through to a website.
This means that advertising and user journeys which are misleading, or omit important information, are very likely to contravene the DMCC.
There is also an expanded list of practices which will always be considered unfair.
Why does this matter?
Misleading advertising is expected to be a major focus of the CMA and the risk of non-compliance for businesses is now much greater. The CMA has new direct enforcement powers including the ability to impose substantial fines.
This is very different from the previous enforcement regime for misleading advertising, which was largely left to the ASA. Although the ASA’s self-regulatory system works well, the sanctions are limited and the risks of “getting it wrong” have largely been reputational. That has all now changed.
What areas will the CMA focus on?
The provisions within the DMCC are broad and the CMA has significant flexibility in relation to how it flexes its new muscles. This means that the CMA’s focus is likely to shift as commercial practices and consumer habits evolve.
In the early stages of the regime the focus is likely to be:
- Misleading pricing
- Misleading environmental claims
- False urgency claims
This reflects indications from the CMA that it plans to address aggressive sales practices, the provision of false information to consumers, imbalanced contractual terms, and areas where it has previously carried out enforcement work.
Our experts work across sectors and have many decades of experience helping clients to operate compliant advertising campaigns, price promotions and product pages.
Subscription contracts
The DMCC introduces new duties on businesses offering subscription contracts. These obligations arise throughout the consumer’s journey, from initial promotion of the subscription, through to renewals, cancellation and post-termination.
Businesses offering subscriptions will be required to provide consumers with additional information at each stage of their journey. This should mean that consumers can make fully informed decisions about subscriptions. The obligations in the DMCC will be automatically implied as terms in any subscription contract with consumers for goods or services.
The new rules are likely to come into force in Spring 2026. Businesses are getting ready now for this raft of changes. Given the CMA’s new enforcement powers, we expect an increased focus on compliance with these new duties.
For more on this see our commentary: Subscribe here: A spotlight on consumer contracts
Fake reviews
The DMCC introduces several new offences relating to fake and misleading reviews including:
- Submitting fake reviews
- Commissioning fake reviews
- Publishing consumer reviews in a misleading way
Businesses will also have new ‘active’ duties to take steps to avoid publishing fake or misleading reviews or hide the fact that someone has been incentivised to give a review.
The CMA is likely to have a major focus on combatting fake reviews given that reviews are considered a key part of consumer decisions to purchase. This has already been a focus of the CMA, including an investigation into the trade of fake and misleading reviews online in 2019 resulting in businesses making commitments regarding their future practices. With the introduction of the DMCC there is likely to be a renewed focus on this area.
It’s important that businesses can verify that the reviews they display are real. Our experts have a range of experience in helping businesses get the review process right – from shorter reviews to more in depth testimonials.
Environmental claims
‘Green’ or ‘environmental’ claims are within the scope of the DMCC and we expect ‘greenwashing’ to be a central target of the CMA’s new powers. Advertisers who make misleading green claims may face very substantial fines and potentially claims from consumers for civil redress.
The ASA and CMA have already taken a very robust approach to environmental claims, and it is clear that businesses require a high level of substantiation.
In addition to issuing its Green Claims Code in 2021 – which sets out how businesses can tell consumers about their environmental credentials without misleading them – the CMA has investigated the environmental claims of several businesses. In parallel, the ASA has made many findings that advertisers have presented their environmental credentials in a misleading manner.
Our experts have advised clients on green credentials and assisted clients with ASA investigations in this area across all sectors, from clothing to consumer goods, to energy.
