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New powers for CMA in relation to 'online interfaces' that harm consumers

Posted on 26 May 2020

The Competition and Markets Authority (CMA) is being given new powers from 2 June 2020 to seek Court orders in relation to websites or other 'online interfaces' such as social media accounts that breach consumer protection laws and risk causing serious harm to consumers' collective interests. The CMA will be able to seek such orders where there are no other means that would be effective in bringing that collective harm to an end. Where a Court considers it appropriate to make such an 'online interface' order, it could include such measures as disabling access to the relevant website or part of a website, and also requiring domain names to be put into the CMA's name. 

Guidance on how the CMA will exercise its powers under The Consumer Protection (Enforcement) (Amendment etc) Regulations 2020 (the Regulations) is awaited. In the meantime, it is important to note the context for the Regulations, namely implementation of the EU Consumer Protection Coooperation Regulation (the new CPC Regulation) which came into effect in January 2020. As a result, the Government has stressed that the powers now being awarded to the CMA are separate from DCMS' proposals for Ofcom to exercise enforcement of a proposed statutory 'duty of care' on global media companies in its Online Harms White Paper Response. It has also stressed that the introduction of these new powers should not prejudice or limit the Government's ongoing review of UK consumer laws, as highlighted in its 2018 Green Paper on Modernising Consumer Markets

Regardless, these new powers are very much in keeping with the CMA's renewed focus on consumer protection and online practices.  The CMA will retain these powers after the expiry of the Brexit transition period by virtue of the Consumer Protection (Enforcement) (Amendment etc.) (EU Exit) Regulations 2019 and so, despite their European origin, they may be a key enforcement tool in the UK for years to come.

New enforcement powers in relation to 'online interfaces' 

The most significant change to the enforcement framework is the provision of express powers – which the UK Government has decided to give to the CMA – which will facilitate the removal of certain content from websites or block access to those websites. The Regulations state that the powers arise in relation to 'online interfaces' which are defined as any software, including a website, part of a website or an application, that is operated by or on behalf of a trader, and which serves to give consumers access to the traders' goods and services. This could also extend to social media accounts and Amazon/eBay and other seller pages. 

The CMA can seek a Court order where it considers there is a 'Community infringement' i.e., one relating to a breach of certain EU laws including, for example, provisions relating to misleading advertising and unfair consumer contracts. The CMA may seek an order against both the trader/website operator behind the 'online interface', but also against intermediaries who are not themselves responsible for the infringement.

The Court will make an online interface order where:

  1. there is a risk of serious harm to consumers' collective interests; and
  2. there are no other means that would, by themselves, be wholly effective in bringing the infringement to an end. 

An online interface order could require any of the following in relation to the online interface:

  • Removing or modifying content
  • Disabling or restricting access
  • Displaying a warning to consumers
  • Deleting a domain name and taking steps necessary to facilitate the registration of that domain name by the CMA

An online interface order can also be sought on an interim basis, including without notice.

The CMA may publish any online interface orders in the form and manner it considers appropriate, alongside the identity of the person engaged in the relevant conduct.  

It will be interesting to see the extent to which the CMA seeks to use its powers, and how the Courts will approach such applications. Some guidance may be found in the Courts' approach to website blocking orders in relation to sites that infringe IP rights, where the Courts have readily granted such orders when satisfied that they are proportionate and effective.

Other amendments

The Regulations also widen the scope for redress measures for consumers where there has been a breach of certain consumer protection laws. Currently, the Enterprise Act 2002 only provides for enhanced consumer measures offering compensation or other redress to consumers where loss has been suffered. As a result of the Regulations, redress measures in relation to Community infringements will be available for the benefit not just of consumers who have suffered a loss but also consumers who have been affected in any other way.

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