How the DMCCA 2024 reshapes subscription contracts

The UK government has confirmed plans to introduce a new regulatory regime for subscription contracts under the Digital Markets, Competition and Consumers Act 2024 (DMCCA 2024), with implementation expected in Spring 2027.

The reforms will apply across a subscription market worth an estimated £26 billion annually and are designed to strengthen consumer protection while encouraging greater competition between providers.

The new rules will affect a wide range of sectors that rely on recurring payments, including digital services, streaming platforms, memberships, software subscriptions, retail delivery schemes, and lifestyle services.

Why the reforms are being introduced

Government figures suggest consumers spend around £1.6 billion each year on unwanted subscriptions, with approximately 155 million active subscriptions currently in circulation across the UK. The average consumer reportedly holds three subscriptions and spends around £500 annually.

The reforms are intended to address several recurring concerns in the subscription economy, including:

• inadequate pre-contract information;
• poor visibility around renewal terms;
• limited reminders and updates; and
• difficult or overly complex cancellation processes.

Easier switching is expected to increase competitive pressure within subscription-based markets and encourage businesses to compete more actively on price, service quality, and customer experience.

Key changes under the new regime

Enhanced disclosure requirements

Businesses will be required to provide clearer and more prominent information before consumers enter into subscription contracts. This is expected to include details relating to pricing, renewal arrangements, cancellation rights, and minimum contract terms.

The government has indicated that the framework will align closely with the existing Consumer Contracts Regulations 2013 where possible, in order to reduce complexity and maintain consistency across consumer protection rules.

Two statutory cooling-off periods

One of the most significant reforms is the introduction of dual 14-day cooling-off periods.

Consumers will have:

• an initial 14-day cooling-off period when entering a subscription contract; and
• a second 14-day cooling-off period when certain subscriptions auto-renew.

The renewal cooling-off period will apply where:

• a free or discounted trial converts into a paid subscription; or
• a contract lasting 12 months or more renews automatically.

Where consumers cancel during a renewal cooling-off period, they may be entitled to a full or proportionate refund depending on how much of the service has already been used.

The government considered concerns from digital content providers about “binge and cancel” behaviour but ultimately decided not to create special exemptions for those sectors.

Simpler cancellation processes

The reforms place significant emphasis on making cancellation straightforward.

Businesses will be prohibited from:

• creating unnecessary obstacles to cancellation;
• delaying consumers unreasonably during the cancellation process; or
• requiring payment before a rolling subscription renews.

Where subscriptions are entered into online, consumers must also be able to cancel online.

Although businesses may still present retention offers or request customer feedback, they must not use these mechanisms to frustrate or deter cancellation requests.

Stronger consumer remedies

The new regulations will also strengthen remedies where businesses fail to comply with their obligations.

Consumers may become automatically entitled to refunds for certain breaches without needing to prove financial loss. In addition, where a business fails to notify a consumer of their cooling-off rights, the cooling-off period may be extended for up to 12 months unless the failure is rectified earlier.

The Competition and Markets Authority (“CMA”) will also have powers to order automatic refunds and extend cooling-off periods where businesses fail to comply with the regime.

What this means for businesses

For subscription-based businesses, the reforms will require substantial operational and legal preparation well ahead of the anticipated 2027 implementation date.

Businesses should begin by:

• identifying all consumer subscription arrangements currently in place;
• reviewing renewal and cancellation journeys; and
• assessing whether existing terms comply with the forthcoming requirements.

The government has acknowledged that implementation costs are likely to be significant.

Businesses may also experience commercial impacts arising from increased customer churn as cancellation becomes easier and switching between providers becomes more accessible.

Importantly, companies should be aware that under the DMCCA 2024, the CMA may impose fines of up to 10% of global turnover for non-compliance.

What this means for consumers

For consumers, the reforms are intended to deliver greater transparency, more control over recurring spending, and easier ways to manage subscriptions.

The new rules should:

• make subscription terms clearer before sign-up;
• reduce the likelihood of consumers becoming trapped in unwanted renewals;
• improve refund rights; and
• simplify cancellation procedures.

The government also hopes the reforms will increase competition across subscription markets, giving consumers greater choice and encouraging providers to improve value and service quality.

Looking ahead

The government intends to introduce the necessary secondary legislation when parliamentary time allows, with implementation currently expected in Spring 2027.

Further guidance is anticipated on key concepts such as what constitutes a “straightforward” cancellation process and what retention practices will be considered acceptable.

While the reforms are designed to create fairer and more competitive subscription markets, their long-term impact on business models, consumer behaviour, and market competition will become clearer only after the government’s planned five-year post-implementation review.