The CMA’s new enforcement and investigatory powers

The consumer law provisions of the DMCC Act came into force on Sunday 6 April reforming consumer protection in the UK. To learn more about the key changes see our article.

On Friday 4 April, the CMA produced its long-anticipated guidance documents setting out how it will be implementing the consumer protection regime. The CMA and the UK Government made a joint statement reiterating the importance of consumer protection for economic growth. With the DMCC Act imposing both positive and negative obligations, businesses ought to be aware of the type of penalties the CMA and courts can now impose under this regime and the CMA’s new enforcement and investigatory powers. 

Enforcement 

The consumer law provisions of the DMCC Act have multiple routes of enforcement. 

CMA investigations

The CMA has a range of powers enabling it to directly enforce the consumer protection provisions in the DMCC Act. When it comes to information gathering, the CMA can request information from businesses before and after it launches a formal investigation, such as: 

• Internal documents
• Business records 
• Details of customers and transactions 
• Research and testing results 

The CMA can also request that companies create documents, data sets or provide evidence to demonstrate the accuracy of any factual claims a company has made in the course of its commercial practice. 

In addition to having information gathering powers, the CMA has the power to observe how a company conducts its trade, the power to purchase products and the power to enter premises with or without a warrant, depending on the circumstances.

Bristows can assist with CMA and ASA investigations, to find out more please see this article. 

Penalties

The CMA has explained that in the early days of utilising its enforcement powers, it will be targeting enforcement action on the more egregious practices that consumers are facing such as aggressive sales practices, providing information that is objectively incorrect to consumers, and banned practices such as fake reviews. In recognition of the obligations placed on businesses and the need for a proportionate implementation of the provisions on fake reviews, the CMA’s initial focus until July 2025 will be assisting businesses with compliance rather than enforcement. 

Should the CMA use its direct enforcement powers and upon investigation find an infringement of consumer law, the CMA can impose a monetary penalty of up to 10% of a company’s annual global turnover. It can also require Enhanced Consumer Measures within any settlement agreement with a company. These are measures aimed at providing redress, ensuring compliance or widening the choice that consumers have in a particular market. In addition, the CMA can impose Online Interface Notices requiring a company to alter or remove content from its online interface, disable or restrict access to it or display a warning to consumers on the interface. 

Where the CMA deems it sufficiently urgent that a commercial practice needs to be prevented, the CMA can apply to the court for an injunction. Moreover, should the CMA or another designated enforcer, seek to uphold consumer protection through civil law before the UK courts, the court are empowered to impose monetary penalties of up to £300,000 or, if higher, up to 10% of the company’s global turnover. Penalties for non-compliance with the investigatory process can also be imposed by the court or the CMA. 

Finally, where the CMA deems a breach is sufficiently serious, the conviction and punishment of individuals can be sought in criminal law. The penalties obtainable in such circumstances include imprisonment, monetary penalties, compensation orders and director disqualification orders.