From 1 January 2027, businesses selling subscriptions to UK consumers will face a significantly tougher compliance regime under the Digital Markets, Competition and Consumers Act (DMCCA).
Many businesses are aware of the headline changes but the recently published draft Regulations and guidance (expected to be finalised shortly) provide much greater clarity on what compliance will actually look like in practice.
Key requirements include:
Greater transparency before sign-up
Consumers must receive clear, prominent information about pricing, auto-renewal, cancellation rights and when payments will increase.
Mandatory reminder notices
Businesses will need to send reminder notices before the end of free or discounted periods. Reminder notices will also need to be sent at least annually for longer-term subscriptions and more frequently for shorter rolling contracts. For businesses with large subscriber bases, this is one of the most operationally significant requirements. Billing systems, CRM workflows and automated communications will all need to be configured accordingly.
“Easy to exit” cancellation journeys
Cancelling must be straightforward. If customers can sign up online, they should generally be able to cancel through the same online channel. “Dark patterns” and unnecessarily difficult cancellation processes are firmly in the regulator’s sights.
New cooling-off rights
Consumers will benefit from cooling-off periods not only when they first subscribe but also at certain renewal points and where required notices have not been provided. The scope of these rights is broader than many businesses currently appreciate.
Increased risk of refunds
Failure to provide required information or notices can extend cooling-off periods and, in some circumstances, give consumers rights to cancel and recover payments.
Confirmation and record-keeping obligations
Various notices and confirmations must be provided on a durable medium, with businesses able to demonstrate compliance.
Importantly, the regime applies to a wide range of subscription models, including many digital, SaaS, membership, streaming, subscription box and auto-renewing service offerings. It applies to consumer contracts, so businesses that sell to both consumers and business customers will need to consider where the line falls for their particular model.
This is not just a streaming-services issue. The rules can affect gyms, membership organisations, subscription box providers, software and SaaS businesses, digital content providers and any other business model built around recurring consumer payments.
It is also worth noting that the regime applies to any business selling subscriptions to UK consumers, regardless of where that business is based. Non-UK businesses with UK customers are caught.
What about existing subscribers?
The current guidance indicates that the new regime will apply to subscription contracts entered into on or after 1 January 2027. Where a pre-existing contract auto-renews onto a new term after this date, the new subscription rules will not apply. Businesses with existing subscriber bases should nevertheless consider whether applying similar standards across all customers is operationally simpler and provides a better customer experience than operating separate compliance regimes for legacy and new subscribers.
The compliance stakes are real
The Competition and Markets Authority (CMA) is the lead enforcer under the DMCCA, with significant enforcement powers at its disposal, including the ability to impose penalties of up to the greater of 10% of global annual turnover or £300,000, without needing to go to court. Non-compliance is not just a legal risk; businesses that make it difficult for consumers to cancel are increasingly facing reputational damage and customer trust issues that carry their own commercial cost.
For many organisations, compliance will require more than updating terms and conditions. Customer journeys, billing systems, renewal processes, CRM workflows and retention practices may all need review.
With just over ten weeks until implementation, now is the time to assess whether your subscription model would withstand regulatory scrutiny. The question is no longer whether your terms and conditions are compliant. It is whether your entire subscription journey, from sign-up to cancellation, is DMCCA-compliant.
Contact us
If you would like to discuss how we could help you with a review of your subscription journey, please get in touch with Chris Perrin from our Corporate, Commercial and Finance team.
