The way media subscriptions are agreed with consumers is set to change, with new legislation aiming to promote fair competition and enhance consumer protection. Daniel Fletcher, a senior associate at Forbes Solicitors, looks at what a new subscriptions regime means for media companies.
A new era for media subscription models
Media and streaming services work hard to appeal to consumers and encourage them to part with their cash, especially in a world where people have become accustomed to free-of-charge news and content.
Free trials, introductory discounts and bundled deals have become part and parcel of media subscription services. Such offers can provide users with value-for-money and convenience, while delivering regular revenue for publishers. However, the way subscriptions are marketed to consumers and agreed with them is about to change.
From Spring next year, new rules will be introduced in a move designed to protect consumers from so-called ‘subscription traps’. The Digital Markets, Competition and Consumers Act 2024 (DMCCA) enhances existing laws to end unfair commercial practices. It provides the Competition & Markets Authority (CMA) with heightened powers to address any actions, omissions and practices that are deemed misleading, aggressive and unfair for consumers. This is extending to subscriptions in Spring 2026, when a new subscription contracts regime will be rolled out.
An exact date for the introduction of the regime is still to be announced, but it’s not too early for media service providers and publishers to take action. A recent government consultation on the new measures highlighted there are approximately 9.7m unwanted subscriptions in the UK, costing consumers around £1.6billion. The CMA and Department for Business & Trade wants to end this and will not tolerate ‘subscription traps’.
Failure to comply with the DMCCA could see businesses fined up to 10% of their global turnover and held accountable for compensating consumers.
Adapting subscription strategies
Complying with the new subscription contracts regime will require businesses to prioritise changes in three key areas of subscription models.
- Pre-contract: Businesses will need to ensure that consumers fully understand the terms of a subscription contract, before they commit to it. This will mean that all the important and relevant details about a contract, such as costs, frequency of payments, duration and terms about renewals and cancellations are all made easily available – and clearly presented – to consumers ahead of them entering into an agreement.
Contract information will have to be presented in clear and plain language, which is legible and doesn’t require consumers to take any extra steps to read or access any detail, other than what’s required to agree a contract. Businesses will also have to consider the format and channels through which they deliver contract information. For example, if it’s done verbally over the phone, will it be audible and comprehensible? - Renewals: Automatic renewals are commonplace in subscription models, and an area highlighted by government as a cause of ‘subscription traps’. People may not realise when a subscription trial or duration has ended, because it auto-renews, leaving them paying for a contract they’re unaware of.
Under new and enhanced rules, businesses will have to provide clear and timely communication about subscription renewals. Reminders will need to be sent to subscribers, advising them about the end of their agreement and the options available to them. This must include information about cancellation methods, as well as explicitly detailing any changes to the agreement, compared to the original contract. For example, any changes to price, duration and terms of the renewed subscription will have to be clearly detailed. Long gone are the days of burying subscription renewals and price increases at the end of ‘Terms and Conditions’ that consumers will not read. - Cooling off and cancellations: The DMCAA bolsters consumers’ existing statutory right to ‘cool-off’, once they have entered into a contract. Under the new rules, people will have two 14-day ‘cooling-off’ periods, with these running after the initial agreement of a contract and after a renewal has been agreed. Additionally, businesses must make it easier for consumers to cancel a subscription, with any refunds paid in a timely manner.
Cancellation processes will need to be straightforward, with guidance implying that ‘consumers must not have to take steps that are not reasonably necessary to exit their contract’. The CMA is likely to take a dim view of cancellation options hidden behind several clicks and pages of a website or app. Similarly, it could be deemed unacceptable to request that consumers have to submit cancellations via different channels to those used to agree the contract. For example, if a contract was agreed via clicking online, why is it reasonable to request that a subscriber must make a phone call or send a written request to exit an agreement?
Further guidance is expected from the CMA ahead of the changes in Spring of next year and this is likely to reinforce requirements for subscription strategies that avoid trapping consumers. Media companies are best placed adapting contracts and marketing practices to ensure they comply with new consumer rights under the DMCCA.
Forbes Solicitors has nine offices across England that look after the interests of clients nationwide, alongside 61 partners and an overall headcount of nearly 400, advising on a wide range of commercial and personal matters.
