You Didn’t Tick It, You Shouldn’t Pay It: CMA Targets Online Add‑ons

You may remember that in November last year, the Competition and Markets Authority (CMA) launched a 'major consumer protection' enforcement drive targeting eight businesses over concerns about price transparency.

The first case concluded in April, with a £4.2 million penalty imposed on the AA for breaching consumer law.

What is the latest?

1. Some investigations e.g. into Appliances Direct are ongoing; and
2. The CMA has now closed its investigation into Marks Electrical.

During its investigation into Marks Electrical, the CMA found that Marks Electrical (an appliances retailer) automatically opted customers into paid add-on services - such as appliance recycling and packaging removal - when purchasing household goods online. Customers were then charged, despite not actively choosing these extra services.

Genuine, informed choice is a key element of consumer law. As the CMA summarises in its press release: "Businesses are not allowed to use pre-ticked boxes or other forms of automatic opt-in for optional extras which costs money". By doing so, Marks Electrical had engaged in a form of 'dark pattern', breaching consumer law.

The Final Infringement Notice was handed down today. Marks Electrical must:

• pay a financial penalty of £720,000 for infringing consumer protection law;
• refund fees paid by affected customers (around £600,000 in total); and
• report back to the CMA with updates on the refund process.

As with the AA case, the fine reflects a 40% discount because Marks Electrical immediately stopped the conduct after the CMA opened its investigation, admitted to breaking the law and agreed to settle the case early and not to appeal the decision.

What does this mean for you?

The CMA is incredibly active in this space – and it is moving quickly.

You should take the opportunity to review your customer journey. Design choices that nudge consumers into paying more are firmly in scope and on the CMA's radar.

Optional should mean optional, with non-acceptance as the default. You cannot use any pre-ticked boxes, default add-ons or other forms of automatic opt-in for optional extras which cost money. You must seek consumers' express agreement, not rely on a passive failure to deselect. Tools and processes used by digital teams online because they are effective are unlikely to have been designed with compliance in mind.

To review your online customer journey and ensure CMA compliance, speak to Dan Smith or Zoe Pearman.

Read the original article on GowlingWLG.com