The Labour government under Prime Minister Andy Burnham has announced a legislative crackdown aimed at easing the cost of living. For e-commerce retailers, this is particularly concerned with two widespread tactics: misleading discounts and subscription traps.

The announcement signals an accelerated enforcement timeline for the Digital Markets, Competition and Consumers Act 2024 (DMCCA). As stated in the official press release, “Pretend prices and deceptive deals will be a thing of the past under the Prime Minister’s plans to ban retailers from making misleading claims to customers about discounts.” What this means in practice is that inflating the value of items to then advertise a discount, and misleading and difficult-to-cancel subscriptions, are going to incur significant penalties.

Here is exactly what UK retailers need to know to ensure compliance, protect profits, and avoid heavy fines from the Competition and Markets Authority (CMA).

The crackdown on misleading discounts

As expressed in the government’s press release, a key concern of consumers in the UK is that of “pretend prices and deceptive deals”, specifically instances where outlets artificially inflate prices to give a false sense of value, only to immediately advertise discounts, or where discounted prices are the same as they were before the discount, “intended to trick consumers into thinking they are getting good value.”

This autumn, the government is launching a specialized consultation to ban certain pricing tactics by automatically classifying them as unfair commercial practices under the DMCCA.

The practices that will be banned

If you rely on aggressive reference pricing to drive conversions, you must immediately audit your strategies. The practices specifically targeted are:

  • Fake “was/now” pricing: Setting a higher baseline price for a short period just to create a dramatic “sale” price later.
  • Invented discounts: Discounts where the “sale” price is actually the standard price the item has always sold for.
  • Misleading Recommended Retail Prices (RRPs): Displaying a manufacturer’s RRP as a point of comparison when neither the retailer nor the broader market has genuinely sold the item at that price.

Under current laws, proving a discount is deceptive requires enforcers to take on complex cases. Adding these specific tactics to the DMCCA’s prohibited list means they will automatically be considered unfair, making it substantially easier for the CMA to levy massive fines, potentially up to 10% of a company’s global annual turnover.

The end of subscription traps (January 2027)

In addition to the crackdown on misleading discounts, the government has also announced an accelerated timeline for the ban on so-called “subscription traps”. Originally slated for Spring 2027, this legislation will now go into effect in January 2027, at a time when many consumers are expected to begin new annual sign-ups.

At present, UK consumers spend an estimated £1.6 billion annually on subscriptions they no longer want. The government expects these new rules to save shoppers an average of £14 a month. 

Incoming subscription requirements

To remain compliant, businesses offering subscriptions (such as beauty boxes, meal kits, or digital services) must ensure their user journeys to meet four key criteria:

  1. Clear pre-contract information: Before sign-up, you must prominently display total costs, billing cycles, auto-renewal terms, and exact cancellation steps.
  2. Regular reminders: You must notify consumers before a free trial ends, before any 12-month+ term renews, and every six months for rolling monthly plans.
  3. The “Click-to-Cancel” rule: It must be as easy to leave a subscription as it is to join. If a customer can sign up online with a single click, they must be able to cancel online without hurdles or being forced to call a retention team.
  4. 14-day cooling-off period: Consumers will be legally entitled to a 14-day cancellation window without penalty during two distinct phases: the initial sign-up and when a long-term contract or free trial automatically renews


    (Note: Certain charitable memberships for cultural and heritage organizations are excluded from these rules.)

How 7Learnings keeps prices compliant and profitable

It is no longer an option to manually tweak base prices to then run arbitrary “50% off” weekend campaigns, as this will quickly lead to CMA enforcement. Instead, retailers must rely on intelligent, dynamic pricing to capture demand while staying on the right side of the law.

7Learnings automatically detects if and when you are allowed to run a discount that won’t violate these new discounting laws. The platform can also determine how these prices need to be communicated, i.e., a change in the full price or as a discount, ensuring you remain 100% compliant.

Additionally, advanced pricing platforms like 7Learnings that leverage predictive AI enable price setting aligned with consumers’ willingness to pay, eliminating the need for deceptive pricing tactics.

Machine learning models calculate the exact price point that maximizes conversion and profits based on multiple relevant factors such as current elasticity, inventory levels, and competitor data. This has two key benefits:

  • Transparent competitiveness: You can offer genuine, competitive prices that comply with DMCCA regulations while still achieving your profit and revenue goals.
  • Predictable profits: By forecasting demand accurately, you avoid the need to overstock and subsequently run aggressive, potentially non-compliant clearance sales.
DMCCA enforcement infographic: Old vs. New pricing and subscription practices.

Frequently asked questions about DMCCA compliance

What happens if we are caught using fake “was/now” prices?

Under the DMCCA, the Competition and Markets Authority (CMA) has enhanced direct enforcement powers. If these tactics are added to the explicitly banned list following the autumn consultation, the CMA can directly levy fines of up to 10% of your global annual turnover without needing to take you to court first.

Does the easy exit rule mean we can no longer use save-offers or retention teams?

You can still offer alternatives or display a “save offer” online during the cancellation flow, but you cannot force a customer to navigate complex hurdles or make a mandatory phone call to cancel if they signed up online. The process must be straightforward.

Do we have to notify monthly subscribers every month?

No. For rolling monthly plans, the DMCCA requires you to send a reminder every six months. However, you must also send reminders before a free trial ends and before any term of 12 months or longer automatically renews.

Can we charge a cancellation fee if someone uses the 14-day cooling-off period?

No. If a consumer cancels within the initial or renewal 14-day cooling-off period, you cannot apply any penalties, and they must be entitled to a full or proportionate refund.