UK government launches consultation on consumer law reform

September 5, 2023

The UK government has launched a consultation on consumer law reform while the Digital Markets, Competition and Consumers Bill continues its passage through parliament. The consultation covers five areas of consumer law, some of which are or more interest to tech lawyers than others. The five areas are:

  • display of pricing information (reform of the Price Marking Order);
  • hidden fees and drip pricing;
  • fake and misleading reviews;
  • online platforms; and
  • online interface orders.

The consultation seeks views on legislating to expressly prohibit the buying and selling of fake reviews, and dealing with a firm’s failure to take reasonable and proportionate steps to ensure reviews displayed to consumers reflect genuine consumer experiences. It also seeks views on whether and how the government should approach the issue of, and identify, drip pricing.

In addition, it covers the issue of whether online platforms should be subject to enhanced duties of professional diligence and whether the use of online interface orders should be more widely available to regulators and not just the CMA.

Alongside the consultation, the government has also published research about drip pricing. It found that:

  • 46% of the 525 online and mobile app providers in its sample include at least one dripped fee (not including delivery fees) as part of their checkout processes;
  • out of four sectors covered by the report (entertainment, hospitality, retail, transport and communication), dripped fees are most frequently found in the transport and communication sector (72% of providers) and least frequently in the retail sector (15% of providers) once delivery fees are excluded;
  • nearly half of providers (41%) included dripped fees that met more than one criterion of harm (mandatory, pre-selected and optional, presented past the halfway point of the checkout process, costing more than 25% of the product price, more than three dripped fees);
  • across all sectors, service fees (fees charged to receive/purchase a service, such as booking or processing fees) tended to meet the most criteria of harm;
  • after factoring in provider market share, consumer expectations and the size/degree of harm of the dripped fees, dripped fees (other than delivery fees) are estimated to cause UK consumers to spend an additional £595 million to £3.5 billion online each year.

The consultation ends on 15 October 2023.