New consumer rights laws online sellers need to know

New consumer rights regulations and enforcement powers have come in under a law that impacts how small businesses can set and manage pricing. 

The Digital Markets, Competition and Consumers Act (DMCCA) is designed to protect consumers from unfair practices, particularly when it comes to online selling. 

If you rely on online reviews, manage a subscription service, or use drip pricing, keep reading for the latest consumer rights laws. 

Digital Markets, Competition and Consumers Act – what is it and who’s it for?

Much of the DMCC Act has been designed to prevent larger digital platforms gaining a monopoly of the market share. Nevertheless, it still comes with changes that could affect your small business.

The main part of the DMCC Act small businesses need to focus on is surrounding consumer protection. Whether you sell products and services online, or simply have a website for your brick-and-mortar shop, the new rules on fees and online reviews are important to be aware of.

Enhanced consumer protection – everything you need to know

Here’s what the new law covers when it comes to protecting consumers, particularly online. 

1. Fake online reviews are banned

Many customers rely on reviews to make informed decisions before they buy goods and services. The Competition and Markets Authority (CMA) knows this too, which is why they’re cracking down on fake and misleading reviews. 

This includes:

• commissioning fake reviews
• not mentioning (or hiding) when reviews have been incentivised
• publishing reviews in a misleading way

The new rules means you’re responsible for making sure there aren’t any misleading or fake customer testimonials or reviews on your website or social media channels.

We know that online reviews can really make or break your small business, so make sure you check out our guides on encouraging Google reviews and managing fake reviews.

This part of the DMCCA came into force in April 2025. 

2. Drip pricing is no longer legal

Drip pricing is a strategy where a business shows a lower price than what a customer will end up paying. As the customer moves through the buying process, the actual cost gets higher as additional fees, charges, or taxes are added on.

An example of this can be when buying from an online shop, as shipping fees or payment processing fees are added at the checkout. Other common examples include travel and hospitality, where you may be charged a booking fee for booking online. Whatever the industry, it’s found that hidden fees cost consumers £2.2 billion every year (Gov.uk).

However, the new consumer rights laws mean businesses will need to show the total price of a product (including fees, taxes, and any other charges) to be calculated and shown in advance. If this can’t be calculated, the platform will at least need to inform the customer that such fees are coming.

These new changes make sure that customers fully understand the cost of something before they commit to buying it.

The new law to tackle drip pricing came into force in April 2025. 

3. Protecting consumer savings schemes

Consumer savings schemes, which allow customers to make payments in order to save for goods bought at a later date, are also set to change under the new bill.

An example of a consumer savings scheme is encouraging customers to make frequent payments over the course of a year, with the understanding that the money is there to spend at a specific time – Christmas being a popular driving force for some of these schemes.

However, until recently this has been risky due to a lack of regulation, meaning customers risk losing their money if the business becomes insolvent. 

But customers using these schemes now have more protection, as the DMCCA means that any businesses operating in this space will need the appropriate insurance to protect customers’ money.

This part of the DMCCA came into force in April 2025. 

4. Clamping down on subscription traps

Subscription models can be great for customer retention, but can also be another way consumers get caught out. Things like automatic renewals and free trials coming to end can cause unexpected fees. 

If you offer subscription services in your business, you’ll need to:

• provide customers with pre-contract information to make sure they understand their contract
• accept refunds on renewals if within the 14-day ‘cooling off’ period (this is an expansion from just new contracts)
• notify customers when any free trials or discounted price offers are coming to an end
• make it simple for customers to cancel a subscription contract

The CMA has long been investigating auto-renewal contracts, so you’ll also need to make sure that it’s simple for customers to cancel a subscription if they wish to. 

The law also has expanded the ‘cooling off’ period to apply to contract renewals as well as new contracts – meaning customers have 14 days to cancel with a full refund after a contract renews.  

While this aspect of the DMCCA is expected to come into force in spring 2026, it doesn’t mean you can’t review your subscription strategy now. No one wants to feel tricked into a contract, so making your pricing and renewals clear is important for building a happy customer base and viable subscription business.

DMCCA – consumer law for larger businesses

While consumers will receive more protection, the law also seeks to create a more level playing field for businesses in the digital market – especially those going up against large digital platforms.

Large digital platforms with significant market power will be deemed as having ‘strategic market status’ (or SMS). Many of the changes as part of the DMCC law will focus on these SMS businesses – who will be monitored by the CMA.

The CMA will now require SMS businesses to notify them of certain acquisitions to make sure they’re not gaining full control of the market.

The chief executive of the CMA, Sarah Cardell, says: “Digital markets offer huge benefits, but only if competition enables businesses of all shapes and sizes the opportunity to succeed.

“This bill is a legal framework fit for the digital age. It will establish a tailored, evidenced-based and proportionate approach to regulating the largest and most powerful digital firms to ensure effective competition that benefits everyone.”

Luckily small business owners need not worry, as only the largest digital platforms in the UK will be deemed to have SMS.

What happens if you don’t comply with the new consumer laws?

Whether you’re a small business or a large one, it will still be a legal requirement to follow the regulations laid out in the DMCCA. If found to have broken any of these consumer laws, you risk being fined up to 10 per cent of your global turnover.

The CMA has new enforcement powers, making it easier to take action against companies that aren’t following consumer protection laws. 

The DMCCA became law in May 2024 and changes were introduced from April 2025, with further rollouts expected in spring 2026. 

Legal expenses insurance and helpline

If you have legal expenses insurance as part of your Simply Business policy, you also have access to a number of useful services through Arag Businesslaw (you’ll just need your voucher code found in your policy documents to register).

Arag has a legal advice helpline, available whether you’re facing a serious legal issue or just want to check something with an adviser. They also offer a range of legal templates and guides.

The information in this article is not legal advice and you shouldn’t use it to make decisions. Check the legislation for the full wording, and seek professional advice if you need it.

You can also check information on the Business Companion, a government-backed website offering free legal guidance.

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