CMA opens first consumer law investigations under new DMCC enforcement powers

The Competition and Markets Authority (CMA) has now announced its first enforcement action under the Digital Markets, Competition and Consumers Act 2024 (DMCC).

As of 18 November, the CMA opened investigations into eight businesses suspected of consumer law breaches – including ticketing websites StubHub and Viagogo. It has also issued advisory letters to 100 businesses across 14 sectors, putting them on notice to review their pricing and sales practices. 

In April this year, the DMCC brought in significantly strengthened monitoring and enforcement powers for the CMA, as we previously reported. The new enforcement regime represents a stark change. Previously, the position was that consumer claims had to be enforced through the courts. However, this was viewed as being cumbersome and inefficient. The CMA can now take direct enforcement action without going to court, levying fines of up to £300,000 or 10% of a trader’s annual worldwide turnover (whichever is higher) and additional penalties (between one and five per cent of daily turnover) can be imposed for non-cooperation (such as delays in providing information) or breaching undertakings. The CMA’s latest actions demonstrate that it is now actively deploying these enhanced powers to monitor compliance and take action where necessary.

This heightened enforcement environment introduces a key risk that company directors must consider when reviewing their business operations. Regulatory breaches and any resulting fines can ultimately have a knock-on impact on the solvency of a business. 

On 7 April 2025, the CMA published a document outlining its approach to consumer protection. This sets out further detail on how the CMA will apply the new regime, how the 4Ps (pace, predictability, proportionality and process) framework will apply in consumer cases, and provides an update on its initial enforcement priorities. The CMA’s latest update confirms that its initial priorities will be the “most egregious practices”, including drip pricing, where consumers are shown a low upfront price before mandatory charges are added later in the transaction. The CMA will also focus on the use of misleading countdown timers during online purchases and on default opt-ins that automatically enrol consumers into additional services.

The CMA has confirmed that it is focussing on cases where there has been a clear infringement, meaning any fines resulting from the new investigations could be significant. Some of the sectors at greatest risk of enforcement include travel, gyms, and live event ticket platforms. Offending businesses could be pushed into financial distress, either as a direct result of any fine or through reputational damage that undermines commercial viability over the longer term.

Even for businesses which were not previously in financial difficulty, if during a CMA investigation significant fines become a real risk, directors will need to consider their director duties, and in particular whether any contingent fines are a real risk to solvency.

As we have previously highlighted, companies should begin reviewing their commercial practices and assessing their compliance with the new rules to minimise the risk of enforcement action. At the same time, the scope for additional new rules to be added through secondary legislation means that companies will need to continue to follow policy and legislative developments closely.

While the DMCC undoubtedly provides welcome additional protection for consumers, it is another risk for businesses to consider in an environment which was already challenging and is increasingly unpredictable.

The key to avoiding the risk of both CMA fines, and any knock-on risk of financial difficulties, or in a worst case, insolvency, will be to take action early to ensure that businesses are DMCC prepared. If you haven’t already done this, the time to do so is now. Our expert team are on hand to assist with consumer regulatory or insolvency risks posed by the DMCC.

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