Click, subscribe…comply: preparing for the UK's new subscription-contract regime

The Digital Markets, Competition and Consumers Act 2024 (DMCC Act) introduces a new, comprehensive regime for consumer subscription contracts which is expected to come into force in Spring 2027 (rather than Spring 2026 as originally stated). These rules will have a significant impact on any business offering auto-renewing contracts.

What do you need to know

• Scope: any auto-renewing contract for goods, services or digital content (online or offline) is caught unless expressly exempt.
• Core obligations: the new regime introduces several new requirements on businesses to provide consumers with increased protection and ensure that they can easily suspend and exit a subscription contract. The core obligations include requirements relating to key pre-contract information, cooling-off windows, tailored reminders, straightforward cancellation and processing refunds within 14 days.
• Enforcement: the Competition and Markets Authority (CMA) has indicated that it will initially support businesses to transition towards compliance, but will increasingly move toward enforcement. The CMA will be able to levy fines of up to 10% of worldwide group turnover for non-compliance of the new regime, as well as requiring companies to provide redress to affected consumers. For a broader look at these new enforcement powers, see our April 2025 update.

What do you need to do

• Businesses need to review and update their subscription processes, including pre-contract disclosures, cooling-off periods, reminders, cancellation procedures, and refund mechanisms.
• Non-compliance carries significant financial penalties, reputational risk, and potential CMA enforcement, making early preparation essential.

Why the new rules are needed?

Subscription contracts can benefit both consumers and businesses by promoting loyalty and delivering predictable revenue to businesses. However, they can also leave consumers paying for services they no longer want. The impact assessment published in 2023 by the Department of Business and Trade (DBT) indicated that unwanted subscriptions cost UK consumers around £1.6 billion a year.

The CMA has indicated that the new rules are intended to rebalance this relationship by introducing clearer obligations on companies and stronger protections for businesses. While the CMA has previously issued compliance guidance and accepted undertakings in relation to subscription contracts (for example, anti-virus software providers using auto-renewal), this is the first time it will have direct enforcement powers to address breaches.

Developments in other jurisdiction reflects similar concerns, for example:

• US: in September 2025, the Federal Trade Commission fined Amazon USD 2.5 billion alleging it enrolled consumers in Prime subscription without their consent and made it difficult for consumers to cancel.
• Australia: in October 2025, the Australian Competition and Consumer Commission commenced proceedings against Microsoft alleging it misled millions of Australian consumers when communicating subscription options and price increases when it integrated its AI assistant, Copilot, into its Microsoft 365 subscription plans.
• EU: the European Commission recently closed its public consultation on the Digital Fairness Act aimed at strengthening protection and digital fairness for consumers including by prohibiting subscription / cancellation "traps".

What is a "subscription contract" under the DMCC Act?

The DMCC Act defines a "subscription contract" as any auto-renewing contract for the supply of goods, services, or digital content, both online and in-person, unless specifically excluded.

The new regime covers two main types of agreements:

• Auto-renewing contracts: any contract that automatically continues for a fixed or indefinite period, with the consumer automatically incurring liability for future payments until they end the contract.
• Contracts with a free trial or reduced cost for a specific period of time: any contract that offers a free or reduced-price period that automatically converts to a full-price subscription at the end of that period.

A broad list of contracts are expressly exempted in Schedule 22, including contracts for regulated utilities, insurance, financial services, residential leases, package holidays, childcare, and gambling. In its response to the consultation (published in April 2026), the Government stated that it intends to add exclusions for certain memberships of charitable, cultural and heritage organisations.

Requirements of the new regime

Businesses will need to conduct a comprehensive review, and potentially overhaul, of their existing practices. Compliance will involve more than updating terms and conditions; it will require operational, technological, and customer service changes across organisations.

In late 2024 and early 2025, DBT consulted on proposals to inform secondary legislation to implement the new requirements. The Government published its response to this consultation and stakeholder feedback on 2 April 2026. Secondary legislation will be needed to fill in some of the remaining operational details of the proposed reforms. DBT is expected to publish detailed guidance closer to the commencement of the regime to assist businesses in achieving compliance. In the meantime, businesses should consider if they currently meet the regime's requirements, or make changes to prepare.

The DMCC Act provisions build on and expand existing protections in the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs), which will continue to apply in respect of contracts that do not automatically renew. In its response to the consultation, the Government has recognised the need to ensure consistency with the CCRs where possible, noting that divergence would create complexity for business and consumers.

Provide "key pre-contract information"

Under the new regime, businesses must provide "key pre-contract information" before a consumer has entered into an auto-renewing contract. Schedule 23 of the DMCC Act set out 11 types of key pre-contract information, including:

• notification that the contract (and the consumer's liabilities) will continue (indefinitely or for a fixed term) until the consumer takes steps to terminate the contract;
• any minimum period before the consumer can terminate the contract;
• whether future payments may be at a higher rate than the original price (and when these will be payable);
• the minimum total amount the consumer will be liable for; and
• the steps the consumer must take to terminate the contract.

In addition, businesses are required to provide consumers with "full pre-contract information". The key pre-contract information must be provided separately to the full pre-contract information.

Offer required cooling-off periods

The DMCC Act introduces a statutory 14-day cooling-off period both for when the contract is first taken out and for any subsequent renewals. If a consumer cancels a subscription contract during an initial cooling of period or a renewal cooling-off period, the business must provide the consumer with a refund within 14 days of the consumer's decision to cancel.

Refunds for goods:

• Returnable goods (category 1): if a consumer cancels within the cooling-off period and they have either not received the goods or return them to the trader, the consumer will receive a full refund (including the least expensive delivery fee).
• Non-returnable goods due to the characteristic of the goods (category 2): perishable or bespoke goods are "non-returnable". If the consumer cancels before the goods have been supplied, the consumer will receive a full refund (including least expensive delivery fee). If the goods have been supplied before the consumer cancels then the consumer is entitled to a proportionate refund.
• Non-refundable goods (due to circumstances): if a consumer receives and unseals or inseparably mixes goods after delivery (for example, goods sealed for health / hygiene reasons, sealed audio / video / software, or goods irreversibly mixed with other items), a trader may deduct from the refund the contract price of the affected goods (including least expensive delivery fee).

Refunds for services:

• If a consumer cancels within the cooling-off period and no services were supplied during that period, they are entitled to a full refund. If services were supplied during the cooling-off period, a consumer receives a pro-rata refund, with the trader able to deduct a proportionate charge for the part of the contract performed in the relevant cooling-off period.

Refunds for digital content:

• Initial period: where supply begins within the initial cooling-off period, the trader must obtain the consumer’s express consent to start supply and the consumer's acknowledgement that the initial cooling off right is waived. If the trader supplies digital content without securing both, the consumer does not have to pay for the digital content supplied.
• Renewal contract: if a consumer cancels within a cooling-off period and no digital content has been supplied, they will receive a full refund. If supply has begun within the cooling-off period, any refund will be reduced on a pro-rata time basis for the part of the digital content contract performed in the relevant cooling-off period.

Refunds for mixed contracts:

• The consultation suggested that, for mixed contracts, the relevant refund rules should apply separately to the corresponding component of the goods, services or digital content supplied under the subscription contract. This approach aligns with the CCRs. In its response to the consultation, the Government commented that responses varied and that it will provide guidance on how the regulations apply to mixed contracts.

Send consumers tailored reminders

The DMCC Act imposes a new obligation on businesses to issue timely reminder notices ahead of each renewal. There are three categories of reminder notices, depending on the nature and duration of the subscription: (i) reminder notices; (ii) end of contract notices; and (iii) cooling-off notices.

Reminder notices:

• Reminder notices must be sent at certain intervals before the contract auto-renews or when a concessionary period expires.
• Reminder notices must be sent to remind a consumer that auto-renewal is due and that they have the option to cancel their contract before renewal.
• Businesses must also specify in the pre-contract information the time(s) when reminder notices will be sent (the timing of which must be reasonable).
• The Government proposes to legislate to require that the purpose of any reminder notice must be immediately apparent to the consumer.

End of contract notices:

• An end of contract notice must be provided once a consumer has exited / cancelled their subscription contract.
• It must include the date the contract ended (or will end) and any overpayments received from the consumer must be returned.

Cooling-off notices:

• A cooling-off notice is required when a consumer enters a cooling-off period (within 14 days of entering into the contract and another 14-day window after certain renewals)
• The DMCC Act requires these notices to include specific information, including: (i) confirmation that the subscription contract is continuing; (ii) the consumer’s right to cancel during the cooling-off period; and (iii) the dates for the cooling-off period. The Government will also require that information is provided about the costs of returning goods after exercising a cooling-off right on renewal

Allow "easy" cancellation

Businesses will be required to ensure that customers can cancel subscription contracts in a "straightforward" way and without needing to take "any steps that are not reasonably necessary". Further guidance is expected on this.

Importantly, the DMCC Act specifies that customers must be given the option to cancel a contract online if the contract was entered into online. Instructions on how to do so must be clearly displayed.

What should businesses do now?

The new rules will require affected businesses to assess their customer flows, service and renewal processes to ensure compliance. The CMA's direct enforcement powers will apply to the subscription contract regime (see our April 2025 update).

Below is an overview of the practical steps businesses should be taking to prepare for the regime:

Next steps

Businesses should coordinate across legal, product, marketing, and customer service teams to ensure the new regime is understood and compliance is embedded into all subscription processes. Preparing now will reduce enforcement risk, streamline customer interactions, and ensure your business is ready when the new regime comes into force.

Other Authors: Isabella Hunt, Associate; Finlay Sadler-Wilson, Solicitor

Want to know more?

• New era for consumer enforcement in the UK, 7 April 2025, for a summary of the consumer law changes introduced by the DMCC Act.
• From five stars to fines: the risks of fake reviews in the UK, 14 July 2025, for a summary of the prohibitions on fake reviews, concealed incentivised reviews and misleading review information.
• Greenwatch: How widespread is greenwashing by UK businesses? Which? Investigates, 17 July 2025, for a discussion of a report published by Which? in relation to misleading green claims and best practice tips.