New UK Legislation to Tighten Rules for Subscription Services
Subscription-based business models have grown rapidly across consumer sectors, offering convenience and predictable recurring revenue. However, a new buyer protection framework is set to significantly change how auto-renewing subscriptions operate in the UK.
From 2026, substantial reforms to subscription contracts will be introduced under the UK’s Digital Markets, Competition and Consumers Act 2024 (DMCC Act). #Petbusinesses operating subscription services in the UK will need to prepare for stricter rules governing renewals, cancellations and consumer communication.
Timeline for Enforcement
The core provisions of the new subscription contract regime are not expected to take effect before April 2026. This provides businesses with a limited window to understand the changes, monitor secondary legislation, and prepare for compliance.
The DMCC Act also grants direct fining powers to the UK’s consumer law regulator, the Competition and Markets Authority (CMA). As a result, the consequences of breaching consumer protection rules will be significantly higher, with fines reaching up to 10% of a company’s annual global turnover.
Navigating Different Legal Frameworks
Subscription compliance is becoming increasingly complex for businesses operating internationally. In the US, rules may differ by state, while regulatory requirements in the UK and the EU follow different legislative frameworks.
Subscription businesses must decide whether to adopt a single model that works across multiple jurisdictions or to implement market-specific approaches. While the EU’s Omnibus Directive and related national laws already impose enhanced protections for consumers, the UK has historically taken a lighter-touch approach, with limited enforcement in many sectors.
The DMCC Act changes this position, introducing requirements that exceed certain elements of the EU framework—particularly around pre-contract disclosures, renewal notices and cooling-off rights.
Overview of the New Rules
The DMCC Act aims to strengthen consumer protections in digital markets, with a particular focus on addressing so-called “subscription traps.” While the Act establishes the overall framework, further secondary legislation will define how the rules operate in practice.
The UK government is currently reviewing responses from consultations on the proposed subscription regime.
Legislative Framework for Subscription Contracts
The DMCC Act structures subscription requirements across several key areas.
Pre-Contract Information
The legislation introduces a clear separation between key pre-contract information and full pre-contract information. Both categories are treated as contractual terms, meaning consumers are not legally bound if this information is missing.
Key pre-contract information must be presented together, separately from the full information, at the point of contract entry. This information cannot be provided via hyperlinks and must include payment frequency and amounts, minimum total financial commitment, a summary of cancellation rights, and details on renewal reminder notices.
Full pre-contract information must also be provided in one place before the contract is formed and includes details such as the trader’s identity, contact information and cooling-off rights.
Reminder Notices
Under the new regime, businesses must send reminder notices before subscriptions renew and payments are taken. The timing and frequency of these notices depend on the length of the subscription. For example, annual subscriptions require reminders every six months.
Each reminder must include specific information set out in the legislation, ensuring consumers are fully aware of upcoming renewals.
Ending a Subscription
The DMCC Act requires that consumers be able to cancel subscriptions easily. Cancellation processes must not be overly complex or designed to discourage termination.
Preparing for Compliance
To prepare for the new rules, businesses may benefit from creating a compliance calendar that tracks regulatory milestones, guidance releases and subscription renewal cycles. Additional steps to consider include:
- Review subscription journeys: Ensure customers receive all required information at the correct stages, reminder notices are automated, and cancellation flows are compliant.
- Audit contract terms: Identify auto-renewal clauses, pre-selected options or pricing adjustment provisions that may breach the new rules.
- Plan notification schedules: Map out renewal and reminder communications across subscription durations.
- Simplify cancellation mechanisms: Complicated exit processes are likely to attract regulatory scrutiny.
- Seek specialist advice: The DMCC Act and accompanying guidance may be complex, particularly for businesses operating across borders or selling regulated products.
Potential Secondary Legislation
Recent government consultations explored how secondary legislation and guidance should be developed to implement the DMCC Act. A key focus was cooling-off rights, including when consumers should be entitled to refunds.
Proposals also addressed remedies for trader non-compliance, such as failures to provide key pre-contract information or reminder notices. Additional suggestions included banning contract terms that make consumers liable for renewal payments before renewal occurs and allowing consumers to exit subscriptions at any time—including immediately after a subscription begins or renews.
The consultation further emphasized that cancellation processes should not require repeated contact with the trader.
The next phase will involve analyzing consultation responses before drafting final secondary legislation and official guidance.
Source: GlobalPETS