"All change" for consumer protection

Recent years have seen consumer protection propelled to the top of the agenda for policymakers and regulators. In Spring 2025, long-awaited reforms under the Digital Markets, Competition and Consumers Act (DMCC Act) will overhaul the UK consumer law regime and increase the stakes for non-complying businesses. There are also clear signs of more action to come in this area at the EU level, as the new European Commission gears up for its upcoming 2025-2030 Consumer Agenda.

In 2025, consumer-facing businesses operating in the UK and EU should prepare for increased public and private enforcement of consumer protection rules, particularly on hot topics such as greenwashing and online choice architecture.

Consumer law enforcement – the new antitrust?

This Spring, the UK Competition and Markets Authority (CMA) will see its investigation and enforcement toolkit bolstered by the DMCC Act. For the first time, the CMA will gain the power to issue infringement decisions for consumer law breaches and directly impose fines of up to 10% of a business’ global turnover, bringing the regime more closely in line with the CMA’s existing antitrust enforcement regime. Currently the CMA can only accept undertakings from a company under investigation or otherwise apply to court to seek an enforcement order.

The magnitude of the fines issued by the CMA, and whether they will match the levels we have seen in antitrust cases, remains to be seen. So far, the fining guidance published by the CMA signals that it intends to replicate some aspects of its approach in Competition Act cases, such as taking account of aggravating factors and the availability of settlement discounts. The introduction of potentially large financial penalties should act as a significant deterrent for non-compliance.

The CMA has already stated that it is “carefully considering and preparing for [its] first cases” under its new enforcement arsenal. We expect the CMA will start implementing its blueprint for these investigations in the coming year, as set out in its new Guidance on direct consumer law enforcement. Over time, we will likely see the courts scrutinising the CMA’s application of its new fining powers. Looking beyond the CMA’s remit as the main consumer protection authority, the current UK focus on consumers has also materialised through several sectoral reforms and initiatives, including the Financial Conduct Authority’s (FCA) Consumer Duty, which came into force across 2023-2024 and for which we still await the first test cases.

These UK reforms are in line with EU trends towards enhanced enforcement. We are continuing to see consumer organisations submitting pan-European complaints to the EU Consumer Protection Cooperation (CPC) network, a cross-jurisdiction mechanism aimed at streamlining consumer enforcement via coordinated action in the EU. The CPC network, coordinated by the European Commission, is also proactively conducting consumer law “compliance sweeps”. The new Commissioner in charge of the EU consumer protection portfolio, Michael McGrath, has signalled his intention to propose further enhancements to the Commission’s role in enforcing consumer laws across the EU.

All eyes on greenwashing, “dark patterns” and essential spending

Recent years have seen a marked uptick in enforcement action related to companies’ environmental claims. We can expect greenwashing to remain a key area of focus for consumer protection authorities. To date, the UK has not introduced any cross-sectoral legislation targeting greenwashing specifically. However, alongside pursuing enforcement action, the CMA has been highly active in publishing a Green Claims Code and sector-specific guidance. The FCA also introduced an anti-greenwashing rule for financial services firms in May 2024. In the EU, the Directive on Empowering Consumers in the Green Transition was adopted in March 2024, while the proposed Directive on Green Claims is progressing through the legislative process. Companies should ensure they stay informed of developments in this area, including any emerging regulatory divergence.

This year, the CMA and other consumer law enforcers will likely continue to grapple with consumer harms linked to online choice architecture and so-called “dark patterns”, such as “drip pricing” practices and misleading scarcity or popularity claims. To facilitate enforcement in this area, the package of UK reforms in the DMCC Act modernises existing consumer rights and creates novel areas of protection for the digital age. This includes, for example, new rules on fake reviews and subscription traps, with the latter being subject to transitional arrangements. At the EU level, the European Commission has recently signalled appetite to address similar policy concerns, with suggestions of a proposal for an EU Digital Fairness Act. Authorities are also expected to be vigilant of any consumer protection threats that may derive from the deployment of AI technology.

Considering cost-of-living constraints, we can also expect enforcement to focus on areas of essential spending and where consumers are under particular financial pressure, such as housing and accommodation, transport, groceries and everyday household items.

Consumer law and competition litigation: are the blurred boundaries here to stay?

In the past few years, mass competition damages claims have continued to gain momentum in the UK, including on a “standalone basis” where there is no prior enforcement decision by a regulator. However, the UK’s opt-out collective proceedings regime is not currently available in respect of consumer law breaches. The attractiveness of this regime has led claimants to seek to push the boundaries of what qualifies as a breach of competition law, with a view to bringing high-value claims on an opt-out basis (for example, characterising consumer law issues as an abuse of dominance). We expect this trend to continue this year.

There have already been calls by some to extend the UK’s collective proceedings regime to cover consumer law breaches, in addition to competition law, due to the disconnect between the respective public enforcement and private enforcement models. A proposal to do so was ultimately excluded from the final version of the DMCC Act despite being raised during the bill’s reading. It remains to be seen whether the Labour government will revive this proposal in 2025 (or beyond).

At the EU level, many Member States are completing their implementation of the EU Directive on Representative Actions. This will pave the way for more collective consumer claims across the EU. The Directive leaves it at the discretion of Member States to provide for opt-in or opt-out mechanisms, or a combination of both, with some Member States adopting enhanced consumer redress regimes going beyond the minimum standards set out in the Directive (so-called “goldplating”).

Consumer-facing businesses operating in the UK and the EU should carefully monitor this emerging stream of potential mass consumer claims, as their outcomes could incentivise claimants to bring (in the case of the UK) more creative claims – increasing litigation risk for businesses.