DMCC Bill to be amended to cover fake reviews and drip pricing

January 24, 2024

The UK government has announced amendments to the Digital Markets, Competition and Consumers (DMCC) Bill. This follows a consultation last autumn. The consultation focused on five policy areas (display pricing information, hidden fees and drip pricing, fake and misleading reviews, online platforms, and online interface orders) and further changes to the list of commercial practices which are in all circumstances considered unfair and private redress in the DMCC Bill.

The government now proposes to:

  • prohibit commercial practices related to fake reviews by adding these to the list of commercial practices that are considered unfair in all circumstances, making these subject to civil liability;
  • clarify the law on drip pricing by introducing new requirements in the DMCC Bill on drip pricing that require unavoidable (mandatory) fees to be included in the headline price or indicated at the start of the purchasing process;
  • undertake further stakeholder engagement on what obligations platforms should be subject to with respect to consumer law, and how that should be publicly set out;
  • extend the power to make applications to the court for online interface and interim online orders to all public designated enforces as listed in Part 3 of the DMCC Bill; and
  • continue to explore the case for extending private redress rights to further unfair commercial practices.

Two key areas which are likely to be of interest to tech lawyers are fake reviews and drip pricing online.

Fake reviews

The government will add the proposed banned practices on fake reviews to the list of banned practices in Schedule 19. They will be subject to civil liability only.

The government will work with the CMA to publish guidance to explain the law and set out what ‘reasonable and proportionate’ steps traders are expected to take to remove and prevent consumers from encountering fake reviews; and to prevent any other information presented on the platform that is determined or influenced by reviews from being false or in any way capable of misleading consumers.

The CMA will consult on this guidance before it is finalised and published. This will be in addition to the continuing work of Local Authority Trading Standards who will be able to use this guidance as a reference in their enforcement action.

Drip pricing

The government is aiming to reduce the prevalence of dripped fees which undermine price transparency and make it difficult for consumers to make informed purchasing decisions based on the price of a product or service; and limit price competition insofar as traders compete on misleading headline prices rather than the price which consumers must pay in practice.

The government will expressly prohibit presenting a headline price which does not:

  • incorporate in the price any fixed mandatory fees that must be paid by all consumers; and
  • disclose the existence of any variable mandatory fees and how they will be calculated.

Expressly setting this out in legislation aims to enable enforcers to take more effective and swifter action against those who exclude fixed mandatory dripped fees and the existence of variable mandatory dripped fees from the headline price displayed to consumers.

It is not planning, at this stage, to legislate in relation to optional fees. However, it will further consider the practice of optional dripped fees, including proposals to regulate such fees in a proportionate way that does not adversely affect specific sectors and allows for consumers to compare prices in a fair and transparent way across providers. It will also continue to assess whether this is best achieved through sector specific guidance, legislation, or both.