New rules for subscription contracts – Here’s what you need to know 

Are you a B2C provider?  Do you (or do you want to) provide digital content, goods and/or services to consumers on a subscription model? 

If so, you could be affected by the new Digital Markets, Competition and Consumers Act 2024 (“DMCC”) which partly came into force earlier this month.   

Although the DMCC is “new”, most substantive consumer law is the same as before so the wheel has not been reinvented per se, it’s just the tyres have been replaced for new ones with better treads to keep businesses safely on the consumer-friendly road.

For the purposes of this article, we’re going to focus on who, what, how, why and when in relation to the DMCC for your business if you have or are considering subscription terms for consumers.   

Who is a “consumer”? 
A customer of goods or services who is acting outside of their trade, business, or profession.  

What counts as “subscription contract”? 
Subscription terms between a business and its consumer are a “subscription contract” for the purposes of the DMCC if they: 

1. are used for your business’ provision of digital content, goods or services to a paying consumer; 
2. auto-renew until the consumer gives notice to stop; 
3. have a free or entry-level fee rate specified in the terms for an initial period that automatically switches to a higher rate once that initial period expires and the terms automatically continue (at the higher fee rate) until the consumer exercises their right to end the contract; 
4. are not an excluded class of contract which, at the time of writing, includes: contracts for insurance and financial services, healthcare and medical, or utilities; and contracts regulated by OFCOM under the Communications Act 2003. 

How do you stay compliant with new subscription contract rules under DMCC? 
Businesses would be wise to start preparing for new obligations the DMCC imposes on businesses operating on subscription models to consumers. 

These new obligations include: 

1. providing key pre-contract information and full pre-contract information to consumers before they enter into subscription contracts.  Now is the time to review your existing subscription terms and pulling out the details such as automatic renewal terms, how to cancel, cooling-off periods, fees and fee increases into easy-to-read consumer information packs provided before they enter the contract (like a proposal document for a B2B arrangement); 
2. giving consumers the 14-day cooling-off period for the initial period and each automatic renewal periods.  If the consumer cancels during a cooling-off period, any refunds must be without penalty so you may need to revisit your existing subscription terms regarding cooling-off periods, renewals, renewal payments and refunds; 
3. giving consumers effective reminder notices in advance about automatic renewals, renewal payments and free trials ending – if this is not in your business practises already it is worth introducing them soon so by the time it is a DMCC obligation it is already BAU for your business; 
4. ensuring consumers can exit easily. Check your terms are clear and do not impose any unreasonable hurdles for the consumer to deter them from ending the subscription.  If it is not already in your terms or business practises, start writing to consumers to acknowledge their cancellation requests and refund any overpayments. 

Why are these changes happening? 
For consumers: to broaden protections and offer more transparency and consumer-friendly contracts (and procedure).  Specifically for subscription terms, the DMCC aims to prevent subscription traps as they have become known. 

For businesses: to promote market confidence and level the playing field by promoting fair competition. 

When do the changes come in and when do I have to act? 
The changes to subscription contracts are not due until Spring 2026 so businesses have time to prepare but we strongly encourage that preparation be immediate rather than rushed through in Spring 2026. 

If you like any support with preparing for the change, please get in touch