The Digital Markets, Competition and Consumers Act 2024 received Royal Assent in May. The Act grants the CMA new direct enforcement powers in relation to breaches of consumer protection law. These new powers enable the CMA to investigate, determine and take enforcement action to address:

• infringements of certain consumer protection laws;
• breaches of undertakings given to the CMA;
• breaches of CMA direct enforcement directions;
• providing false or misleading information in connection with the CMA’s exercise of a direct enforcement function; and
• non-compliance with statutory information notices.

This is a big deal because up to now the CMA has relied mainly on obtaining voluntary undertakings from traders. And until these new powers come into force, only a court can determine breaches and take action to stop or rectify them. As the CMA will soon be able to impose fines directly, the risk profile for businesses will change significantly.

But as one wise webslinger once said, with great power there also comes great responsibility. In other words, we need to know how these powers are going to work.

So the CMA has produced draft guidance about its general approach to carrying out its direct consumer enforcement functions. The guidance sets out the range and scope of the new powers, and explains how the CMA will generally conduct direct consumer enforcement investigations.

It has also published a set of draft procedural rules on how the CMA will exercise its direct enforcement powers. These will be legally binding in all cases when the CMA exercises those powers.

The consultation ends on 11 September 2024.