With Cumbria’s dramatic mountains and natural beauty, it’s no surprise that its thriving tourism and leisure sector pulls in millions of visitors every year.
For travel agents, tour providers and visitor attractions, the Digital Markets, Competition and Consumers Act 2024 (DMCCA) represents a major change in consumer law. It sets new rules to regulate how consumer trust must be earned and maintained.
But what should Cumbrian leisure and tourism businesses be aware of specifically, and what happens if they fail to comply with this legislation?
David Wozniak, associate solicitor in Muckle LLP’s commercial team, reviews the impact of the DMCCA on the leisure and tourism sector.
Drip pricing
The DMCCA updates consumer protection law on how leisure and tourism businesses must display pricing information to their customers.
It strengthens rules against drip pricing, where mandatory fees are added late in the customer’s booking journey.
Leisure and tourism businesses must now show the full price of their products, in their invitation to purchase (for example, the advert on their website), including all mandatory charges, such as booking fees and local taxes.
The CMA have been clear that drip pricing will be a key focus area for them, so it is important not to get caught out.
See the impact of failing to comply further on in this article.
A ban on fake reviews
The DMCCA prohibits the submission, commissioning and publishing of fake reviews, as well as the concealment of incentivised reviews by leisure and tourism businesses.
Incentives can take various forms, including cash incentives, free commission on bookings, discounts, vouchers, freebies, free stays or invites to events.
Interestingly, businesses can incentivise reviews as long as they make it clear to their customers that this is the case, and the review itself is a genuine account of the customer’s experience.
The DMCCA also prohibits leisure and tourism businesses from publishing information in reviews (including ratings, summaries, review counts or rankings) which is false or misleading to consumers or displaying this information in a misleading way.
Displaying reviews in a misleading way includes failing to display negative reviews, giving greater prominence to positive reviews, failing to disclose the fact that a person was given an incentive to write their review, etc.
Businesses should be taking extra precautions to ensure that reviews are genuine and authentic and take steps to prevent and remove fake reviews from their websites.
Failure to do so can result in substantial fines.
Failure to comply
The risks of getting compliance with the DMCCA wrong have increased exponentially. Businesses face severe consequences for breaching consumer protection law.
Just to give you an idea, under the DMCCA, the CMA can impose financial penalties of up to 10% of a business’s global turnover or £300,000 (whichever is higher) for serious breaches.
Parent companies can be held liable for the acts of subsidiary companies.
Furthermore, the CMA can impose fines on directors, managers, secretaries, or other persons who control a business if they consented or were involved in the breach of consumer protection law.
Staying compliant
Travel companies need to ensure every part of their digital journey, from pricing to website reviews, complies with the DMCCA.
Having a comprehensive plan to prepare for these regulatory changes is also a chance to build consumer trust and confidence and improve customer experience.
Clearly, the CMA’s new enforcement powers create significant legal and financial risks for businesses, which can be mitigated by staying informed about the regulatory landscape.
If you would like further information on how we can help you to comply with the DMCCA, please contact David Wozniak via [email protected] or 0191 211 7831.
