New legislation will change how subscriptions are agreed with consumers. Daniel Fletcher, a senior associate at Forbes Solicitors, looks at how subscription models must adapt to comply with a forthcoming subscription contracts regime.
The Competition & Markets Authority (CMA) is cracking down on unfair commercial practices. In April this year, many of the provisions contained in the Digital Markets, Competition and Consumers Act 2024 (DMCCA) came into force, setting out changes to consumer law to promote fair competition in digital markets and to enhance consumer protection.
Under the DMCCA, the CMA has enhanced powers to address any actions, omissions and practices that are deemed misleading, aggressive and unfair for consumers. Part of this involves new rules for subscription contracts, with these expected to take effect in Spring 2026. Although an exact date is to be confirmed, it’s not too early to start adapting subscription strategies, as messaging from the CMA and Department for Business & Trade makes it clear they won’t tolerate ‘subscription traps’.
Failure to comply with the DMCCA could see businesses fined up to 10% of their global turnover and held accountable for compensating consumers.
Evolving subscription strategies
To comply with the new regime, businesses will need to look at three key areas of subscription strategies.
1) Pre-contract. It’s critical that consumers fully understand the nature (especially duration) of a subscription contract, before they enter into it. The DMCCA sets out requirements relating to ‘key pre-contract information’ and ‘full pre-contract information’. Essentially, traders will need to ensure that subscription details, such as costs, frequency of payments, duration of agreements and terms about renewals and cancellations are all clearly available to consumers, ahead of them committing to a subscription.
Contract information will have to be presented in clear and plain language, which is legible and doesn’t require consumers to take any extra steps to read any detail, other than what’s required to enter a contract.
2) Renewals. New measures will require clear and timely communication about the renewal of subscriptions. Traders will have to provide consumers with reminders ahead of any auto-renewal. They will also need to communicate cancellation options and check that all future terms for the renewed subscription are easily detailed. For example, any changes to price, duration and terms of the renewed agreement, compared to the original contract, must be explicit. Gone are the days of burying subscription renewals and price increases at the end of ‘Terms and Conditions’ that consumers will not read.
3) Cancellations. The DMCAA bolsters consumers’ existing statutory right to ‘cool-off’, once they have entered into a contract. Traders must make it easier for consumers to cancel a subscription, with any refunds paid in a timely manner. Cancellation processes will need to be straightforward, with guidance implying that ‘consumers must not have to take steps that are not reasonably necessary to exit their contract’. The CMA is likely to take a dim view of cancellation options hidden behind several clicks and pages of a website.
Further guidance is expected from the CMA ahead of Spring next year and this is likely to reinforce requirements for subscription strategies that avoid trapping consumers. Businesses are best placed adapting contracts and marketing practices to ensure they comply with new consumer rights under the DMCCA.
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The clock is ticking on new rules for subscription models
Daniel Fletcher
New legislation will change how subscriptions are agreed with consumers. Daniel Fletcher, a senior associate at Forbes Solicitors, looks at how subscription models must adapt to comply with a forthcoming subscription contracts regime.
The Competition & Markets Authority (CMA) is cracking down on unfair commercial practices. In April this year, many of the provisions contained in the Digital Markets, Competition and Consumers Act 2024 (DMCCA) came into force, setting out changes to consumer law to promote fair competition in digital markets and to enhance consumer protection.
Under the DMCCA, the CMA has enhanced powers to address any actions, omissions and practices that are deemed misleading, aggressive and unfair for consumers. Part of this involves new rules for subscription contracts, with these expected to take effect in Spring 2026. Although an exact date is to be confirmed, it’s not too early to start adapting subscription strategies, as messaging from the CMA and Department for Business & Trade makes it clear they won’t tolerate ‘subscription traps’.
Failure to comply with the DMCCA could see businesses fined up to 10% of their global turnover and held accountable for compensating consumers.
Evolving subscription strategies
To comply with the new regime, businesses will need to look at three key areas of subscription strategies.
1) Pre-contract. It’s critical that consumers fully understand the nature (especially duration) of a subscription contract, before they enter into it. The DMCCA sets out requirements relating to ‘key pre-contract information’ and ‘full pre-contract information’. Essentially, traders will need to ensure that subscription details, such as costs, frequency of payments, duration of agreements and terms about renewals and cancellations are all clearly available to consumers, ahead of them committing to a subscription.
Contract information will have to be presented in clear and plain language, which is legible and doesn’t require consumers to take any extra steps to read any detail, other than what’s required to enter a contract.
2) Renewals. New measures will require clear and timely communication about the renewal of subscriptions. Traders will have to provide consumers with reminders ahead of any auto-renewal. They will also need to communicate cancellation options and check that all future terms for the renewed subscription are easily detailed. For example, any changes to price, duration and terms of the renewed agreement, compared to the original contract, must be explicit. Gone are the days of burying subscription renewals and price increases at the end of ‘Terms and Conditions’ that consumers will not read.
3) Cancellations. The DMCAA bolsters consumers’ existing statutory right to ‘cool-off’, once they have entered into a contract. Traders must make it easier for consumers to cancel a subscription, with any refunds paid in a timely manner. Cancellation processes will need to be straightforward, with guidance implying that ‘consumers must not have to take steps that are not reasonably necessary to exit their contract’. The CMA is likely to take a dim view of cancellation options hidden behind several clicks and pages of a website.
Further guidance is expected from the CMA ahead of Spring next year and this is likely to reinforce requirements for subscription strategies that avoid trapping consumers. Businesses are best placed adapting contracts and marketing practices to ensure they comply with new consumer rights under the DMCCA.
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
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