Digital Markets, Competition and Consumer Bill (UK wide), Price Drip Feeding and Fake Reviews in Tourism.

Posted on January 29, 2024 Updated on January 29, 2024

You may have seen a flurry of recent media report concerning the Digital Markets, Competition and Consumer Bill (DMCCB) first introduced last April and making way through Parliamentary with the target date for UK wide introduction (but not necessarily immediate enforcement) later in 2024. This follows a Department for Business & Trade (DBT) press release update issued on 24 January, the key comments of which is that the Department “will officially add fake reviews to a list of banned business practices, outlaw dripped fees that are unavoidable for consumers and ensure that businesses provide clearer labelling for prices on supermarket shelves.” (my added emphasise not DBT’s).   The Bill covers all industry sectors, but it does have particular resonance to travel, tourism, leisure, culture arts, theatre, live performances, events and retail and therefore, to much of the wider visitor economy.

None of the announcement is absolutely new but it serves to confirm, following consultation and some amendments to the Bill in its passage through the two House of Parliament (Lord yet to complete and Commons, final consideration to follow that) what DBT now intend to include, or not, in the final Bill.  A Bill that will dictate what is included in the guidance to all industries that the Competition and Markets Authority (CMA), a non-ministerial government department, must then in due course apply.  The Bill is probably now sufficiently well developed to be swept up in the dissolution of Parliament process, should an earlier general election be called, before the currently anticipated “second half of 2024” date indicated by the PM.

The Bill itself aimed to: introduces a new digital marketing regime, strengthens consumer protections and improve CMA’s investigation and enforcement powers.  Powers that will including the ability to impose penalties directly without, long, slow recourse to the Courts and significantly increased upper limits for penalties for larger players in the digit market place.  What then, if anything, does the latest press release actually tell us or confirm?

Fake review, as expected, are to be “added to the list of banned practice” and critically “with webhosts held accountable for reviews on their pages”.  I doubt colleagues in destination management or in tourism businesses more generally would oppose either of these proposed actions.  However, like me, many would recognise that accountability, is not yet an as well-established general principle for all platforms for all product sold or promoted within digital market place, as it perhaps should be? Many well-known online accommodation platforms having no legal and arguably take little moral responsibility for the accuracy or indeed basic safety of the product they list.  If they can legally list properties without ensuring that they have basic permissions and safety checks in place, then I am not entirely sure what “being held accountable for reviews” might actually means or achieve in practice. My view may be jaundiced by overly long exposure to the long overdue and still unresolved statutory registration of accommodation debate? I remain sceptical of getting this one over the line in England in what remains of this Parliamentary session but that’s another story.

I believe that there is understandable concern that the Bill and CMA’s aims may focus too sharply on consumer protection.  In the case of fake reviews focusing in on overselling or “bigging up” the offer via paid for or other forms of fake or falsely obtained reviews to the detriment of the consumer who is falsely sold a potentially inferior product than that they may otherwise have chosen.  Businesses, are equally and rightly concerned about fake negative review which by default are likely to sit only on third party sites, as businesses are unlikely to tolerate fake negatives about themselves on site they operate and can control.  Being wrongly deterred from purchasing a perfectly good product may be potentially regarded as less of a “consumer protection” issues?  Therefore, more work may be needed to adequately addressed the issue of malicious reviews within the final stages of the Bill and as subsequent CMA guidance is developed?  Regardless of the unjustifiable harm done to businesses, fake negatives can and do distort the market and falsely reducing or limiting informed consumer choice.

Again, as broadly expected following similar update announcements in November 2023, the news that DBT are to “outlaw dripped fees that are unavoidable” confirms that the measures aimed to tackle price drip feeding are going to be far more limited than perhaps first envisage a year plus ago and certainly they will not physically reduce the actual overall cost of some often big-value goods and service, as many consumers hoped for and (still?) erroneously assume.  In essence, the new regulation tackles things like compulsorily handling, booking, delivery or other fees or mandatory insurance on goods and service that are added to the original headline price toward or at the end of the purchase process and are thus “unavoidable” if the purchase is to be completed. In terms of domestic tourism this is likely to impact on current practices in areas like events, theatre, entertainment and public transport and some, mainly smaller (?), accommodation booking arrangements. 

My understanding, and I could well be wrong, is that common practices like promoting “ticket from £XYZ, handling/booking/delivery fee apply”, will no longer be permitted and thus the likes of say the Trainline will no longer be able to headline a ticket from X to Y at say £110.50 and then add a nominal £1.50 booking fee at checkout but will now have to offer the journey upfront at £112.  In many instances that may involve little more than a site redesign?  Most budget airlines, for example, have long since abandoned the practice of adding APD or booking fees as an afterthought to the booking process; it a design not a process issue, albeit for something like rail travel involving millions of potential price points, a complex one.  For other smaller businesses, in particular, it may, and I stress may have some impact on fragile business models, or involve relatively large corrective costs compared to the returns available at the individual business level. 

For the likes of the Trainline and many of the major third-party booking platforms this is something that they will just get on and do and, in due course, inform their business stakeholders and customers what the changes will be.  For individual destinations and businesses running their own digital booking arrangements, or working with others, to sell (digitally promote) goods and services such as event tickets, my considered advise would be that: unless you can make obvious potentially necessary changes now, with little or no effort or cost attached, then sit tight and await the CMA guidance which is at the very least 2 to 3 months away and which in any case cannot and will not come it effect overnight once published.  I would be surprised if the implementation, let alone enforcement date for small businesses would be this side of October 2024 and could well be much later, even into 2025, assuming the guidance does appear in late spring or into the early summer. 

When implemented and an enforcement date is announced I think it likely that CMA’s interests will be fixed initially on major national and international players and will only shift to the “Visit Some Where’s website or question the validity of the “reviews or the headline digital price for the “Some Where Inn” at some later date.  My understanding which again may be wrong, is that the CMA tend toward investigating complaints, having more than enough to do for now, without actively going looking for minor infringements themselves. Minor infringement or infringement of whatever size by minor players will get picked up but not on day one and probably not until the new system is embedded and well understood by both the industry the consumer.    I am not encouraging compliancy, just trying to be pragmatic, especially now as we rapidly approach the start of another critical main summer season.

What the Bill and guidance isn’t going to do is impact on avoidable consumer cost, most notable in the airline industry and things like choice of seating, priority boarding, additional baggage or other “upgrades.”  If it is possible to fly from X to Y clutching your worldly good in a handbag or carrier bag, having queued up at every stage, accepting whatever seat allocated, bring your own food and drink or whatever for £XYZ, then £XYZ remains the headline price that can be promoted and offered at the start of the digital transaction. 

If you then choose to add pre booked meals, priority check in, security lane or boarding, bring more than your keys and wallet; some baggage with you perhaps? then it remains permissible to add those, “avoidable” extras during the booking process and pay a higher final price at checkout than the headline price offered at the beginning of it. On the same basis a hotel or other accommodation provider should be able to offer a standard room at £XZ upfront but then gives the option to upgrade to a better standard of room or add genuinely optional services as the booking process progresses. The bar to offering additional services like a round of golf, transport to the local station or whatever for many smaller providers remains the Package Travel and Linked Arrangements Regulation 2018 not the DMCCB Again that’s yet another regulatory issue for domestic tourism, that has still to be addressed.

These largely reasonable concessions outlined above do tend by default to apply more to often bigger ticket item, outbound international travel, than they do to domestic tourism and domestic goods and tourism services.  On a brighter note, it does seem that DBT have accepted that a B&B (Bed and Breakfast) or similar establishment can offer bed only and thus sell an avoidable breakfast element as an addition. Again, I would advise colleagues and smaller individual business to await the development of the guidance over the coming months, if not the publication of the full guidance itself, before speculating or investing too much time and effort into preparing for expected restrictions or indeed for promised or hoped for concessions which may still be subject to a significant degree of interpretation and detailed definition.  Not unreasonably, most of the major individual trade association are already all over the individual and nuanced issues involved for their individual tourism sub sectors and they will continue to engage with DBT and CMA over the coming months, as I will for destinations and their constituent businesses, where and when the need arises. 

From a destination management prospective, beyond reassuring local businesses that there is no need for any immediate action for the coming main season and only limited prospect for anything major much beyond that, I would be doing a quick “back of a fag packet” assessment of ticketed events and activities that are run internally or facilitated for others through my digital channels.  I would be checking what if any consumer reviews facilities I might have or host for others on any internally run digital platform. In that way I would at least know if the Bill when it comes into force had any direct impact on anything I currently do.  I might also be checking with my website providers, ticketing agents and other digital platforms that offer online sales transactions for me, or through me for my partner businesses, what their take on implications of the DMCCB might be. If at this stage they don’t have one, then I might start to be concerned!  That said I would reiterate I don’t see any possibility of implementation and critically enforcement this side of the start of the main summer school holidays in mid to late July and very little chance of there being much if any this side of October and quite possibly much later.  Only when the guidance has been developed and possibly only when issued in the coming days, weeks or months ahead will we be absolute certain of the intended implementation and associated enforcement dates.  If and when I find out a date or get some further indication members will be the first to know.

If you have any concern, particularly from a destination perspective, or have had concerns raised to you from individual businesses that are not adequately addressed in my thumbnail sketch above then please let me know ASAP.  I can then raise these either with DBT, CMA directly or the appropriate partner, Trade Associations via our Tourism Alliance channels. Equally if you have any specific questions from businesses, I am happy to try to get tailored answers for you, for them, from the colleagues in the relevant trade bodies who are the subject experts on the various sub sectors from beer and pubs through accommodation in all its many and various glorious forms, to heritage railways and much else besides.

DBT press release is at: https://www.gov.uk/government/news/new-laws-set-to-ban-mandatory-hidden-fees-from-online-shopping-saving-money-for-consumers