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The UK government has accelerated the timetable for a raft of new consumer subscription contract requirements introduced by the DMCCA.

By Calum Docherty, David Little, Christian F. McDermott, Richard Offord, and Irina Vasile

Multinational consumer-facing businesses are subject to a global patchwork of consumer protection laws and regulations, all of which create a complex regulatory landscape. Requirements around consumer subscription contracts are rapidly evolving and increasingly divergent across national regimes. Businesses offering subscriptions to UK consumers…

The CMA has launched a programme of work to investigate reports of businesses failing to respect cancellation rights during the COVID-19 pandemic.

By John D. Colahan and Anuj Ghai

The CMA’s COVID-19 Taskforce Update on 24 April 2020 noted that its COVID-19 Taskforce had received a significant volume of complaints about unfair practices in relation to cancellations and refunds. On 30 April, the CMA released a further update setting out the programme of work it intends to undertake to deal with the issues raised. The CMA will act under its consumer protection powers, rather than under competition law, to deal with unfair practices relating to cancellations and refunds.

The rules will echo ESMA’s temporary measures, however the FCA will extend the CFD restriction to capture closely substitutable products (such as turbo certificates). 

By Rob Moulton, David Berman, Charlotte Collins, and Gabriel Lakeman

The FCA has launched two consultations on:

  • Banning the sale, marketing, and distribution of binary options to retail consumers (CP18/37)
  • Restricting the sale, marketing, and distribution of contracts for difference (CFDs) and similar products to retail customers (CP18/38 and Annex)

These measures are largely the same as ESMA’s temporary product intervention measures in relation to CFDs and binary options, which were first announced in March 2018 (see Latham’s related blog post for more detail). The ESMA measures, which apply for a maximum of three months at a time, but can be extended by ESMA, have already been renewed twice. At the time ESMA’s measures were first announced, the FCA stated that it expected to consult on whether to apply them in the UK on a permanent basis.

Given that the ESMA measures will fall away due to Brexit (although the timing will depend on whether or not a transitional period is agreed), it makes sense for the FCA to act now to ensure that the measures will continue to apply if the UK leaves the EU without a deal.

By Paul Davies and Michael Green

In August 2015, the French government amended the French Energy Transition Law to include provisions rendering “planned obsolescence” a misdemeanour. In the latest wording of the provisions, article L.441-2 of the Consumer Protection Code (Code de la consommation) defines planned obsolescence as “… resorting to techniques whereby the entity responsible for the placement of a product on the market deliberately intends to shorten [that product’s] life span in order to increase its rate of replacement”. Interestingly, this is the French government’s second attempt to define planned obsolescence since introducing the provision two years ago.

Violation of the prohibition on planned obsolescence carries a potential two-year prison sentence and a criminal fine of up to €300,000. As an added deterrent, the law further provides that the courts may increase the fine to up to 5% of the annual turnover of the entity concerned (based on the average of the entity’s turnover in the three years prior to the date of the offence). The courts will therefore have the option of increasing a fine, provided the fine is proportionate to the infringing party’s gain (see Consumer Protection Code, art. L.454-6).