The UK’s Digital Markets, Competition and Consumers Act 2024 (DMCCA) introduces significant new requirements for businesses offering subscription-based products and services to UK consumers.
On 19 October 2026, the government laid draft implementing regulations before Parliament (the draft Consumer Subscription Contracts (Cancellation and Information) Regulations 2026) which, subject to parliamentary approval, provide for the new regime to come into force on 1 January 2027. They also published draft guidance, which will be finalized once the regulations are made.
The regime aims to tackle so-called ‘subscription traps’ through enhanced disclosure obligations, mandatory renewal reminders, additional cooling-off rights, and simpler cancellation processes.
The reforms will affect businesses operating in the UK, including U.S. and other overseas companies offering subscriptions to UK consumers. Importantly, noncompliance could expose businesses to substantial financial penalties, including fines of up to 10% of worldwide annual turnover.
Who Will Be Affected?
The rules will apply broadly to B2C contracts under which goods, services, or digital content are automatically supplied on an ongoing basis and the consumer automatically incurs recurring payment liabilities, as well as free or discounted arrangements that automatically convert to paid or higher-priced subscriptions, subject to statutory exclusions. Under the draft regulations, the new rules would apply to subscription contracts entered into on or after the relevant commencement date.
Affected sectors may include software and SaaS providers, streaming platforms, online retailers, digital content providers, fitness operators, and other subscription-based services.
Importantly, the regime is not limited to UK-headquartered businesses. U.S. and other international companies offering subscriptions to UK consumers may also fall within its scope, even if subscriptions are managed through global platforms.
The legislation and draft regulations contain a series of sector-specific exclusions, including exclusions relating to certain financial products, utilities, telecommunications, accommodations, medical prescriptions and products, package travel, timeshares, childcare, gambling contracts, and certain charitable memberships. The precise scope of each exclusion should be considered carefully.
What Are the Key Changes?
Enhanced precontract information
Businesses will be required to provide consumers with clear and prominent information before they enter into a subscription contract. This includes:
- Subscription pricing and payment frequency.
- Free trials and introductory offers.
- Contract duration and automatic renewal arrangements.
- Cancellation rights and procedures.
The information must be presented so that consumers can understand their financial commitments before subscribing.
Businesses should review their online checkout processes, subscription terms, and customer communications to ensure compliance.
The DMCCA distinguishes between key and full precontract information. Key information must be presented together and separately from other information and, for online subscriptions, without requiring the consumer to take additional steps to view it. This is likely to require more than updating the subscription terms and may require changes to the checkout interface itself.
Mandatory reminder notices
The regime introduces new obligations to provide consumers with reminder notices at prescribed stages of their subscriptions.
Reminders will generally be required before the first payment following a free or discounted period and for renewal payments associated with subsequent six-month periods. Certain longer-term arrangements will require an additional earlier reminder. The precise timing must give the consumer a reasonable opportunity to decide whether to cancel before becoming liable for the relevant payment.
Notices must contain prescribed information, including relevant payment details and cancellation rights. The draft regulations require notices to be provided in writing on a durable medium, with specified information presented clearly and prominently.
For businesses operating large subscription portfolios, these requirements may necessitate changes to billing systems, customer relationship management platforms, and automated communications.
Additional cooling-off rights and refunds
For subscription contracts within scope, the new regime will replace the relevant Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 requirements relating to precontract information and cooling-off cancellation. It retains a 14-day initial cooling-off period and introduces a further 14-day renewal cooling-off period after a free or discounted trial period and where, following a renewal payment, the consumer will not become liable for another renewal payment for at least 12 months or will not become liable for any further renewal payment but the contract continues beyond that period.
The draft regulations provide detailed rules governing returns and refunds. In particular:
- For returnable goods, consumers would generally be entitled to repayment of relevant payments, although the trader may in specified circumstances withhold the refund until the goods are returned or evidence of return is supplied. The consumer may also be responsible for certain return costs.
- Separate rules apply to perishable, bespoke, sealed, and inseparably mixed goods.
- For services, consumers would generally receive a full refund if performance has not begun and a proportionate refund if it has.
- For digital content, restrictions apply to the initial cooling-off right when the consumer expressly requests immediate supply and gives the required acknowledgements. During a renewal cooling-off period, the consumer may be entitled to a proportionate refund. Refunds would generally need to be provided within 14 days.
Extended cooling-off periods
If a trader fails to provide the required initial cooling-off information or renewal cooling-off notice, the cooling-off period may be extended. Broadly, if the trader remedies the omission within the prescribed 12-month period, the cooling-off period will end 14 days after the required information or notice is provided. If the omission is not remedied within that period, the statutory 12-month long-stop applies.
This creates potentially significant additional cancellation and refund exposure for businesses that fail to provide compliant notices.
Easier cancellation and consumer remedies
Businesses will be required to provide straightforward cancellation mechanisms, including online cancellation when consumers can subscribe online.
Under the draft regime, breach of certain statutory duties would give consumers a right to cancel the subscription contract and, where applicable, obtain a refund. Relevant breaches include certain failures concerning precontract information, reminder notices, contractual exit rights, and exit arrangements. These statutory remedies would operate alongside the DMCCA’s public enforcement regime.
Businesses should review cancellation processes to identify unnecessary barriers, including complicated online journeys, mandatory telephone calls, and excessive retention procedures.
These remedies represent a separate financial risk in addition to regulatory enforcement penalties.
Enforcement and Potential Penalties
The subscription rules will be enforceable under the DMCCA’s strengthened consumer protection framework.
Since April 2025, the Competition and Markets Authority (CMA) has had direct enforcement powers enabling it to investigate and sanction certain consumer protection infringements without first obtaining a court order.
Depending on the nature and seriousness of the infringement and the enforcement route used, noncompliance may expose a business to the DMCCA’s enhanced consumer-enforcement regime. Maximum penalties include:
- Up to 10% of worldwide annual turnover or £300,000, whichever is greater, for a qualifying consumer protection infringement.
- Up to 5% of worldwide annual turnover or £150,000, whichever is greater, for certain breaches of enforcement directions or undertakings.
- Up to 1% of worldwide annual turnover or £30,000, whichever is greater, for certain failures to comply with investigative requirements.
Additional daily penalties may apply in specified circumstances.
The CMA and Trading Standards will also have enforcement powers for the new subscription rules.
In addition to regulatory sanctions, businesses may face consumer refund liabilities, remediation requirements, and reputational damage.
For multinational businesses, the potential exposure to turnover-based penalties makes subscription compliance an important legal and commercial risk.
What Should Businesses Do Now?
Subject to parliamentary approval, the draft implementing regulations provide for the new regime to come into force on 1 January 2027. Businesses should assess their readiness now. Key priorities include:
- Review subscription offerings. Identify products and services within the regime’s scope, including subscriptions offered to UK consumers by overseas entities.
- Audit customer journeys. Assess sign-up processes, contractual disclosures, renewal arrangements, and cancellation mechanisms.
- Review reminder systems. Map current capabilities against the statutory framework and the draft regulations and guidance, and ensure systems can be adapted to meet the final timing, form, and content requirements.
- Assess cooling-off and refund procedures. Establish processes to manage new cancellation rights, proportionate refunds, and extended cooling-off periods.
- Review contractual terms. Identify provisions that could make automatic renewal or cancellation disproportionately difficult.
- Monitor further developments. Track the parliamentary approval process and publication of the final regulations and government guidance.
For international businesses, compliance may require UK-specific adaptations to otherwise standardised global subscription processes.
Looking Ahead
The DMCCA subscription contracts regime represents a significant shift in UK consumer protection law and reflects a wider international trend towards greater transparency and consumer control over recurring payments.
The draft implementing regulations provide for commencement on 1 January 2027, subject to parliamentary approval. Businesses should monitor the parliamentary process and final guidance while taking practical steps to prepare.
With potential fines of up to 10% of worldwide annual turnover, together with expanded cancellation and refund rights, businesses offering subscriptions to UK consumers should treat the new regime as a significant compliance priority.
Early preparation will help businesses identify potential gaps, implement necessary operational changes, and minimise regulatory exposure when the new rules take effect. Alston & Bird is well placed to consider existing terms and conditions and to review existing subscription processes to ensure that businesses are compliant with the new regime.
If you have any questions, or would like additional information, please contact one of the attorneys on our Payments & Fintech team.
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