This is the first in a 2-part series of articles looking at the impact of the DMCCA on the travel sector.
On 6 April 2025, the consumer aspects of the Digital Markets, Competition and Consumers Act 2024 (“DMCCA”) came into force, namely the Competition and Markets Authority’s (“CMA”) new direct enforcement powers and the updated unfair commercial practices regime which includes new bans on fake reviews and drip pricing. These rules will apply no matter where your travel business is located, provided that you are directing your commercial activities to consumers in the UK.
The impact of the CMA’s new powers of enforcement should not be understated, and as the CEO of the CMA has previously stated, the new law “has the potential to be a watershed moment in the way the CMA protects consumers in the UK.”
Below, we have summarised the changes in relation to the new enforcement regime and drip-pricing. We also discuss the changes in relation to fake reviews in a separate article.
The new direct enforcement regime
Historically, UK consumer protection law was enforced by a court-based system which included criminal and civil enforcement powers. The former is incredibly rare, whereas the latter is what has most commonly been used by the CMA. However, these civil enforcement powers lacked the sharp implements needed to punish non-compliance. Under the new direct powers that have just come into force, the CMA will be able to short-circuit the court process, decide for itself whether there has been a breach of consumer law and what the travel company must do to redress consumers, as well as imposing significant fines.
To coincide with the new enforcement regime coming into force, on 14 March 2025 the CMA published guidance note CMA200, the “Direct Consumer Enforcement Guidance”, setting out the stages of the direct enforcement process, from the period leading up to the opening of an investigation to the issuing a final infringement notice and beyond.
Drip pricing
The DMCCA also updates the law on how travel companies must display pricing information to customers. This includes a new ban on “drip pricing”, a practice where consumers are shown an initial price for a travel product, but more fees are added as they proceed with their purchase.
Any “invitation to purchase” (which broadly means any advert which mentions the price and which would include, for example, a listing on a website) must now feature a total price which includes any non-optional charges, such as booking fees and local taxes. If these can’t be calculated in advance, information about them and how they will be calculated must be given equal prominence with the total price. Travel companies may, in some cases, wish to offer optional services. These do not have to be included in the headline price if they are genuinely optional.
A consumer may be presented with an invitation to purchase at multiple points during the process of deciding whether to purchase a travel product. The CMA has stated that, pending its further guidance on drip pricing, due in Autumn 2025, it will only take action against genuinely unexpected mandatory charges added on at the end of a purchasing journey. We therefore recommend that travel companies carry out an audit of their customer booking journey as soon as possible.
Here is a link to the CMA’s guidance note CMA207 “Unfair Commercial Practices Guidance” of 4 April 2025.
The CMA’s approach going forward
Although the existing unfair commercial practices regime hasn’t changed materially, the risks of getting it wrong have increased substantially. The starting point for a fine of any company with material turnover will be between 7.5% – 30% of its UK turnover. This is subject to a statutory cap of 10% of global group turnover or £300,000 (whichever is higher). Furthermore, the DMCCA allows the CMA to also impose fines on directors, managers, secretaries, or other persons who control a business if they consented or connived in the breach of consumer protection law.
To coincide with the consumer aspects of the DMCCA coming into force, the CMA published an approach document on 7 April 2025, setting out their enforcement priorities for the first 12 months. While the law does not apply retrospectively, it does apply in relation to “continuing conduct”, essentially any act of omission which started before 6 April 2025 but is repeated or continues after that date.
The CMA has confirmed that it will target behaviour that is particularly harmful to consumers and represents clear infringements of the law to ensure that harmful conduct is stopped quickly. It has highlighted the following 6 areas as susceptible to early enforcement action:
- Aggressive sales practices against vulnerable consumers;
- Providing false information to consumers;
- Fake reviews;
- Drip-pricing;
- Unfair contract terms; and
- Cancellation charges.
The CMA has also highlighted other areas where the law is clear and there is a risk of enforcement action because of previous action or guidance published by the CMA, CAA, Trading Standards or the Advertising Standards Authority. This includes:
- Countdown timers;
- Discount claims;
- Price comparison;
- 14-day refund obligations;
- Refund guarantees;
- Search result rankings;
- Resort fees; and
- Scarcity and popularity claims.
How travel companies can prepare
The CMA’s new enforcement powers create significant legal and financial risk for travel businesses. We therefore recommend that travel companies carry out an audit of their sales and marketing practices, customer terms and conditions and customer booking journey at the earliest opportunity. Those that do not risk being one of the first targets for the CMA as they begin using their new powers.
How we can help
Please contact the Travel Team at Fox Williams for more information on how we can help your travel business navigate the DMCCA.
