UK Gov to crack down on misleading marketing online

Sarah Cardell, CEO of the UK Competition and Markets Authority (CMA), described this as a “flagship bill” with the potential to be a “watershed moment”, expanding the CMA’s consumer law enforcement powers and introducing a new regulatory regime for digital markets in the UK. It is expected to come into force in the fall of 2024.

The bill, which comes five years after the Report of the Digital Competition Expert Panel​ concluded that digital markets required a new approach, introduces an administrative enforcement model which allows the CMA (rather than the courts) to determine directly whether consumer laws have been breached and impose penalties of up to 10% of a company’s global turnover.

The Advertising Standards Authority (ASA) is currently in charge of investigating cases of malpractice when it comes to online marketing and communications and has called out a number of companies for misleading posts and unsubstantiated health claims. Most recently, it called out the CBD oils, edibles and beauty brand Supreme CBD​ after its founder and ambassadors promoted products on social media without making any indication of their commercial relationship to the brand.

However the ASA’s authority only permits it to hand out warnings and request companies cease non-compliant practices, with no powers to enforce change or issue penalties.

Mark Tallon, chief executive officer at Legal Products Group Ltd, said this new bill will have a significant impact for the functional food and supplements industry, especially with regards to misleading green claims​, fake reviews, subscription services and influencer promotions.