The Competition and Markets Authority (CMA) will have new powers from 2 June 2020 to obtain “online interface orders” under the Consumer Protection (Enforcement) (Amendment etc.) Regulations 2020 SI 2020/484, which come into force on 2 June 2020, implementing parts of the Consumer Protection Cooperation Regulation (EU) 2017/2394 (CPC Regulation).
The CPC Regulation came into force on 17 January 2020. It aims to create a more efficient enforcement cooperation framework to allow national authorities from all European Economic Area (EEA) countries to jointly address breaches of consumer rules when the trader and the consumer are established in different countries. The background to the new CPC Regulation was the European Commission’s findings that consumer laws are not always respected. For example, according to its factsheet on the CPC Regulation, when the Commission screened 352 price comparison websites in 2016, it found that two thirds were misleading on prices. As well as improving cross-EEA cooperation, the CPC Regulation also strengthens powers for national enforcement bodies.
However, the most interesting development is the introduction of the new concept of online interface orders, which are available in both interim and final forms.
What is an online interface?
The Regulations define “online interface” as any software, including a website or app, operated by or on behalf of a trader, which serves to give consumers access to the trader’s goods and services.
Who is a trader?
The usual definition of “trader” applies: a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf.
What is an “online interface order”?
The CMA can apply for an online interface order if it thinks there is a Community infringement. To be granted an order, the court must be satisfied that:
- that there is a risk of serious harm to the collective interests of consumers; and
- that no other available means would, by themselves, be wholly effective in stopping or preventing the infringement.
An online interface order may be made against the person responsible for the infringement or a third party.
An order can stipulate that a trader/website operator must:
- remove content from or modify content on an online interface;
- disable or restrict access to an online interface;
- display a warning to consumers accessing an online interface;
- delete a fully qualified domain name and take any steps necessary to facilitate the registration of that domain name by the CMA.
Where an online interface order is made, the CMA may publish the online interface order, and if known, the identity of the person who has engaged, is engaging or is likely to engage in conduct which constitutes the infringement.
This means that the CMA (and other permitted bodies) can seek orders for a wide range of activities which harm consumers and are being carried out on “online interfaces”. Previous examples of CMA action have involved secondary ticketing websites; anti-competitive online pricing; and online reviews and endorsements. At EU level, action has involved travel and accommodation websites making changes to the way they present prices and offers.
However, the two-part test is quite onerous. Breaches of the rules will need to be very serious for the courts to grant such an order, so we will have to wait and see how effective online interface orders prove to be in practice.
The CMA (and other permitted bodies) can seek orders for a wide range of activities which harm consumers and are being carried out on “online interfaces”.