The Digital Markets, Competition and Consumers Act 2024 (DMCCA) introduces new rules governing consumer subscription contracts and how traders must present pricing information.

Originally due to come into effect Autumn 2026, implementation of the subscription-contract rules was delayed until Spring 2027. The Government has now announced plans to bring forward implementation so that the new regime takes effect 1 January 2027. In this article, we set out the key changes and what traders need to do over the next four months.

Which contracts are affected?

The DMCCA subscription-contract regime is designed to stop consumers becoming trapped in auto-renewing subscriptions they no longer want. It applies to contracts between a trader and a consumer where:

• the trader supplies goods, services or digital content in return for payment;
• the contract automatically renews or continues indefinitely (unless cancelled by the consumer);
• the consumer is automatically charged for each renewal or continuing period.

It also applies to contracts which start with a free period or introductory discount where the price then begins or automatically increases after the end of that period, provided the consumer has a right to cancel before the increase takes effect.

There are some exceptions and the subscription-rules will not apply to utilities, insurance and financial services, medical prescriptions and NHS-funded healthcare services, residential accommodation, food deliveries supplied by micro-entities, package holidays, childcare and education services. For adult social care and healthcare providers, private-payer contracts may be caught if they include recurring payments or a continuing supply; but not Local Authority funded services, NHS-funded services or respite placements which run for a single, fixed period.

The subscription-contract regime only applies where the consumer incurs, or may incur, payment obligations; arrangements that are permanently free are excluded. Cultural and heritage charities had raised concerns about how the new subscription rules would apply to their memberships. In response, the Government has confirmed it intends to remove certain charitable memberships from the new subscription-regime: excluding contracts which are ‘between a charity and a consumer and that allow consumers to attend performances, see collections, or visit places (for example, museums, galleries, historical properties, landscapes, wildlife, performing arts) which are related to their charitable purpose’.

What does this mean for subscription pricing?

Traders are already required to be transparent about pricing: to provide information about what the consumer will pay (including any additional charges), when they will pay it, how often they will pay the fees and how the price may change during the term of the contract.

The DMCCA introduces more prescriptive requirements, obliging traders to record the start and end dates of any free or introductory period, to explain how and when the free or discounted period converts into a paid-for or higher priced subscription, and to confirm the minimum total amount the consumer is liable to pay under the contract.

Pre-contract information

The DMCCA requires traders to provide consumers with ‘key pre-contract information’ relating to the subscription contract. This must be given separately from the ‘full pre-contract information’ and, in respect of online contracts, in such a way that the consumer is not required to take any steps to read the information i.e. not via hyperlink or downloadable attachment.

Both the ‘key’ and ‘full’ pre-contract information must be provided as close as possible to the time when the consumer enters into the contract. It is important that marketing and sales teams review the customer journey to check the full pre-contract information is easily accessible as part of the normal steps taken by the consumer to enter into the contract. 

Reminder notices

Once the contract is entered into, traders must provide consumers with reminder notices before renewals so that they are reminded of the option to cancel before the auto-renewal takes effect. The reminder notice must contain prescribed information, including details of the subscription, any upcoming renewal payment, and how the consumer can end the contract.

Reminder notices are linked to renewal payments occurring at the end of relevant six-month periods, with further detail to be specified in secondary legislation. Reminder notices must also be provided reasonably in advance of the last date on which the consumer can cancel and avoid the renewal charge, giving them enough time to decide whether to continue.

14-day cooling-off period resets for renewal periods

Consumers who enter into contracts online, by telephone or away from the traders’ premises already benefit from a 14-day cooling off period. The DMCCA introduces new protections so that consumers have further opportunities to exit automatically renewing contracts.

A new, 14-day cooling-off period will start:

• at the end of any free or discounted period; and
• at the start of each renewal period, where the subscription automatically renews for a period of 12 months or longer,

enabling the consumer to cancel their subscription contract without penalty.

Traders must inform consumers about their cooling-off rights, or they risk extending the cooling-off period (up to a maximum of 12 months).

Easy cancellation

Traders must provide exit routes which are straightforward and not put in place steps which are unreasonably necessary to exit the contract. If a consumer can sign up online, they must be able to exit online. 

Traders catering to the European market are already required to provide a ‘cancel button’ button alongside any other methods the consumer can engage to bring their contract to an end. However, UK-based traders will need to review their cancellation process and where appropriate, simplify the mechanism so that this is no more onerous than the steps taken to enter into the contract.

The cost of getting it wrong

Where traders breach the DMCCA, and it can be shown the unfair commercial practice induced the consumer to enter into, make, retain, vary, or otherwise proceed with a contract where they would not otherwise have done, the consumer may be entitled to cancel the contract and obtain a refund.

In addition, the DMCCA gives the Competition and Markets Authority (CMA) the power to investigate suspected infringements and, following its statutory enforcement process, directly impose remedies for breaches of consumer protection law including fines of up to:

• 10% of a company's global annual turnover, or
• £300,000, whichever is greater.

Practical next steps

Implementation still requires secondary legislation and commencement regulations, but we expect most traders will have been preparing for these changes already, ahead of the new year. For those that have not already done so, we recommend traders:

• Review the customer journey and complete a gap analysis against the new requirements, looking at how different goods, services and digital content are bundled together, subscription sign-ups, free trials, auto-renewals, cooling-off periods, reminder notices and cancellation processes;
• Update marketing materials and pre-contract disclosures to ensure information regarding price and billing frequencies, minimum commitment periods and auto-renewal periods is presented clearly and prominently before sign-up;
• Remove unnecessary barriers to cancellation, ensuring online subscriptions can be cancelled online, testing cancellation journeys with groups representing the average consumer;
• Ensure communication systems are set up to issue reminder notices, diarising key trigger events relating to the end of free or discounted trial periods, renewals and cooling-off periods;
• Check refund policies to take account of statutory refund rules and update terms and conditions, ensuring staff have an awareness of the new rules and systems in place to ensure compliance in practice.

If you would like any support with your consumer contracts and preparing for these changes, please contact the commercial team.