The devil's in the detail (2024)

“One of the biggest changes to our legislation in the last 10 years — it really does matter.” That’s how CTSI Lead Officer for Fair Trading, Sylvia Rook, describes the Digital Markets, Competition and Consumers (DMCC) Act which, after several years of consultations, committee hearings, amendments and parliamentary scrutiny, comes into force this year.

Rook is well placed to understand the importance of the DMCC Act and its ramifications for Trading Standards. Along with her colleagues, CTSI Lead Officer for e-Commerce David MacKenzie and CTSI Lead Officer for Civil Law, Jemma Cox, she has been instrumental in ensuring that the voice of Trading Standards was heard loud and clear throughout the Act’s long gestation.

Between them, and with the support of well-placed allies in Parliament, they advocated for greater powers for Trading Standards — and consequently greater protections for consumers — to be included in the legislation. And, while not everything on CTSI’s wishlist will make it into the DMCC Act’s final version, the productive nature of the discussions means that the Institute and its experts are likely to have a seat at the table when any future conversations about amendments and related legislation take place.

Long time coming
In the government’s words, the purpose of the DMCC Act is to “provide for the regulation of competition in digital markets; to amend the Competition Act 1998 and the Enterprise Act 2002 and to make other provision about competition law; to make provision relating to the protection of consumer rights and to confer further such rights; and for connected purposes”.

If that sounds complicated, wide-ranging, and somewhat vague, that’s because it is. The DMCC Act encompasses huge areas of online activity relating to communication and commerce, only some of which are relevant to Trading Standards. Among these are new rules relating to the display of pricing information and hidden fees; fake and misleading reviews; and new powers for Trading Standards Officers.

While CTSI has been calling for enforcement powers to be updated in line with online buying and selling practices for many years, its involvement officially began during the DMCC Bill’s initial consultation and planning stage back in the autumn of 2022.

“We were happy with a number of things that were in the first draft of the Bill, many of which were included as a result of previous lobbying by Sylvia and others,” says MacKenzie. “A lot of that is in the detail; it’s a word here and there that makes a significant difference to things that happen in the real world.”

When the process began, the Department for Business, Energy and Industrial Strategy (BEIS) was responsible for the DMCC Bill; it has since been rebadged as the Department for Business and Trade (DBT). In late 2022, BEIS asked CTSI for input on potential amendments to the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), Cox explains. “Around that time, they were reviewing the sunset clause of the Retained EU Law Bill and essentially, this was an opportunity for us to save our main piece of fair trading legislation by moving it into primary legislation. It also went hand in hand with all of the campaigning work that was being done by CTSI to save our legislation and safeguard our standards around that time.

“We had some liaison meetings with the Competition and Markets Authority (CMA) in November 2022 to discuss areas where we have common interests. We were able to feed into the draft of the DMCC Bill in February 2023 and provided detailed feedback, some of which made it into the definitions and changes that are in the final version of the Bill.
“When we were looking at our priority areas we were aware, even from those early stages, of what was likely to be included anyway,” Cox adds. “So we turned our attention to the big issues for enforcement officers. As Lead Officers, it’s really important for us to think about which areas are the most important so that our colleagues, the Officers on the front line, are able to do their job.”

New definitions, new tools
Among the important aspects of the DMCC Act which touch on Trading Standards’ work are a ‘rewrite’ of the CPRs, with improved definitions of ‘misleading actions’ and what constitutes a ‘vulnerable consumer’; additional banned practices, including around the wording that can be used in health claims; a clearer concept of aggressive practices; and a new mechanism for the Secretary of State to create new banned practices.

On the issue of consumer vulnerability, the DMCC Act states that a group of consumers may be considered vulnerable as a result of (among other things) their age, their physical or mental health, and their circ*mstances.

Rook says she is pleased that this has been factored into the legislation: “The definition of ‘vulnerable consumers’ has caused us problems right from the start,” she observes. “A lot of the definitions have now been simplified, which has made things better for consumer protection and enforcement. It’s good that somebody can be considered vulnerable because of the circ*mstances they’re in; that really does help and it will make enforcement easier.”

The DMCC Act also contains new ‘punitive’ measures for civil enforcement cases, including mechanisms to supplement ‘injunctive’ and ‘restorative’ measures already in place, and new monetary penalties for failure to comply with information notices. There will also be strengthened court options and new ‘levers to bring about positive informal outcomes’, as well as some new investigative powers for Trading Standards.

Among the latter, perhaps the most significant is the extension of powers so that Trading Standards can apply through the courts for Online Interface Orders (OIOs) against traders that mislead consumers. An online interface can be defined as ‘any software, including a website, part of a website or an application, that is operated by or on behalf of a trader, and which serves to give consumers access to the trader’s goods and services’.

OIOs are important to Trading Standards because they will make it easier to carry out investigative and enforcement action online. Up until now, only the CMA had the ability to apply for an OIO, and the fact that they are now part of Trading Standards’ toolkit should help disrupt persistent problem traders. And, theoretically, at least, they will be applicable to giant online marketplace platforms as well as the small third-party sellers that operate on them.

According to MacKenzie, “Originally the takedown powers made possible by OIOs were only going to be given to CMA. It’s important, partly for us to be taken seriously as regulators, that those powers have been extended to Trading Standards.”

Partial victories
Another thing that the CTSI team pushed for in their discussions with government was the banning of fake reviews. Here they achieved what Cox describes as a “partial win” — under the new legislation, the use of fake reviews will be classified as a civil infringement, rather than a criminal offence. “Getting fake reviews included in the Bill was really important for us,” Cox says. “But it wasn’t a full win, because we still believe that they should be criminal.”

However, MacKenzie observes, the influence that CTSI was able to exert stands Trading Standards in good stead to keep up the pressure for future changes to the legislation. “If you look at the things that we were pushing hard for, once the Bill was being discussed in Parliament, we knew we wouldn’t get all of them. But part of it was about positioning for the future, and I wouldn’t want to present that as a failure,” MacKenzie says.

Rook is disappointed that fake reviews have not been criminalised, but like MacKenzie and Cox, she is philosophical about the progress that has been made. “I think the frustration was the fact that we didn’t say we want to prosecute everybody who gives a fake review — what we said was, we wanted fake reviews to be on a parallel with the other banned practices,” she points out. “We want to have the option of taking criminal or civil action depending on the circ*mstances, because it is a fraudulent practice — there’s a deliberate ploy, if you’re buying or giving fake reviews. If that was classified as criminal, then there are tools like the Proceeds of Crime Act that could be used. If it’s a civil matter, we don’t have that option.

“With enforcement, there’s often a carrot and stick — and sometimes the stick is necessary. Yes, we work with businesses, and we would very rarely prosecute somebody on the first opportunity. But it’s good to have options, otherwise it can be like fighting with one hand tied behind your back.”

Another area where CTSI plans to keep up the pressure is around improvement in access to data stored digitally or in the Cloud. At present, much of the legislation at Trading Standards’ disposal was designed with physical premises in mind — which is all very well and good when you’re tackling a rogue builder or a warehouse full of illicit goods, but not so useful in the age of virtual storefronts and online marketplaces.

“At Conference last year, I bent the ears of numerous barristers, to ask them if you could virtually enter a virtual premises,” Rook says. “The answer was an emphatic ‘no’. That’s something we need to keep fighting for.”

As MacKenzie points out: “What we were trying to say really simply was, are our powers fit for this digital world? And our suggestion is they’re not. We need to have a powers review, essentially — we have raised it, and we have it documented in Hansard, which is really important.”

“I think the fact that they actually listened to us, and they invited us to further meetings, is a major positive,” Rook says. “Government is a bit like a juggernaut — you can’t just put your hand up and stop it. So if you can have any movement on it at all, then that’s a huge success.”

Friends in high places
Kerry Nicol, CTSI’s Policy and Campaigns Executive, was also instrumental in much of the legwork to ensure that Trading Standards’ views were heard at all stages of the DMCC Act’s progress through Parliament. She coordinated meetings and briefings with supporters and peers, including CTSI President Lord Jamie Lindsay, CTSI Vice President Baroness Christine Crawley, and Baroness Cathy Bakewell.

“We’ve never seen engagement like this from a government department on a Bill before,” Nicol says. “We had multiple meetings about how the improvements suggested would work for the people on the ground. The government has also said that they’re open to further conversations around the points that we didn’t manage to agree on.

“It’s important to say as well, that the support we had from the peers has been fantastic. They really did get behind us and took the time to sit down and understand what the issues were. And David, Sylvia and Jemma have all worked tirelessly on this on behalf of the profession — the progress we made, and what we achieved, just wouldn’t have been possible without them.”

“Having cross-party people speaking on our behalf, and having Trading Standards being talked about in Parliament — all of these things are very great positives,” MacKenzie adds.

Training concerns
So, what next? The DMCC Act was passed on 23 May, and it is likely to come into force in the autumn. The scale of the legislation and its implications will require additional training to ensure that Trading Standards Officers are up to speed with the minutiae — and, with time and budgetary constraints affecting councils across the country, getting everyone trained up in time may be easier said than done.

Nicol says: “The concerns we’ve got are around the training that needs to happen. There have been fundamental changes, and things that Trading Standards Officers need to know about. And there’s been no offer of funding from DBT to help with that training — although they have said that they’re open to conversations about it.”

It’s a concern that Rook shares: “This is a topic that affects everyone, and I would argue that everyone in Trading Standards needs to be aware of it, because it’s so broad-ranging and basic for what we do. Pretty much everyone should be trained on this and that’s a big undertaking. With things like cascade training, which is what a lot of local authorities like, things gets filtered and the subtleties get lost, whereas when you hear something first-hand, you can ask questions.”

As Rook points out, the scale of the legislation will mean that even those who are well-versed in its subtleties will still need to be on their guard: “It’s got 418 pages, 339 sections and 29 schedules. That’s a whopping piece of legislation.

“I am very concerned that some of the changes, although they’re subtle, are very significant. And if Trading Standards Officers and solicitors aren’t aware of them, there could be all sorts of problems down the line. For example, the schedule of banned practices has been renumbered from how they are set out in the CPRs, which could make things really difficult for enforcers who think they already know the rules. There have also been substantial changes to parts of the Enterprise Act as a result. You really have to keep your eyes open for these things.”


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