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The EU’s New Online Contract Rules – What Online Retailers Need to Know

Directive (EU) 2023/2673 (the Directive) which was adopted as part of the EU’s wider consumer protection reforms, introduces a significant practical change to how online retailers must enable consumers to exercise their right of withdrawal from online contracts. Although the directive is primarily framed around distance financial services, it amends the Consumer Rights Directive (Directive 2011/83/EU) in a way that affects all online consumer contracts within scope of that regime.

The Existing Right of Withdrawal

Under the Consumer Rights Directive, consumers entering into online contracts or other distance or off-premises contracts generally benefit from a 14-day right to withdraw from the contract without giving a reason. While online retailers have long been required to inform consumers of this right and provide a model withdrawal form, the legislation has historically focused more on disclosure than on the user experience of withdrawal.

The New Obligation

The Directive shifts the emphasis onto the user experience by requiring that from 19 June 2026 online sellers provide a mandatory withdrawal function for consumers on their e-commerce sites. The underlying principle is that consumers must be able to withdraw from a contract as easily as they were able to enter into it.

In practical terms, this means that the online interface used to conclude the contract must also allow the consumer to submit a withdrawal notice electronically.

Who Is Affected?

These requirements will apply to:

• traders established in the EU that sell goods, services or digital content online to consumers; and
• traders established outside the EU where their online activities are directed at EU consumers.

As a result, many non-EU based retailers who target EU consumers will also need to assess whether their current online contracting journeys meet the new standard.

Key Features of the Withdrawal Function

The Directive sets out clear expectations for how the withdrawal function must operate. In particular, it must:

• be clearly labelled with wording such as “withdraw from contract here” (or equivalent unambiguous language);
• be easy to find, legible and continuously available during the withdrawal period;
• allow the consumer to identify the contract they wish to withdraw from (including partial withdrawal, where relevant);
• enable the consumer to submit a clear withdrawal statement online; and
• generate an acknowledgement of receipt on a durable medium (such as email), including the date and time of submission.

When a consumer has already identified themselves (for example, by logging into an account), the retailer should not require unnecessary re-identification as part of the withdrawal process.

What Businesses Should Be Doing Now

Although the new rules do not apply until June 2026, they are likely to require technical and design changes to online sales platforms, not just legal updates. Businesses should therefore start considering:

• whether existing account pages, order histories or customer dashboards could support a complaint withdrawal function;
• how withdrawal confirmations will be generated and stored;
• look at training customer support/CRM teams on the changes so they can ensure that consumer queries are dealt with compliantly;
• consider what changes will be required to CRM processes to manage the practical aspects of the changes; and
• whether pre-contact information and T&Cs accurately reflect the new withdrawal mechanics.

Failure to implement the withdrawal function correctly may expose businesses to enforcement risk and undermine their ability to rely on protections such as deductions for use or charges during the withdrawal period.

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Quastels Announces New Partner Appointments

Quastels LLP is pleased to announce that Nargiz Abdullayeva is now a partner, and the arrival of Ben Gale and Charlotte Vallins as partners, marking an important step in the continued growth and strengthening of the firm’s real estate and corporate practices.

These appointments reflect Quastels’ ongoing commitment to recognising exceptional talent from within the firm while also attracting highly regarded lawyers who bring depth of experience, strong market reputations and a client-focused approach.

Nargiz Abdullayeva, Residential Real Estate

Nargiz Abdullayeva is now partner following an exceptional career progression at Quastels. She joined the firm’s Residential Real Estate team as a solicitor in 2018 and brings over 10 years’ experience advising on high-value residential transactions for UK and international clients.

Nargiz has played a key role in the development of the firm’s Residential Real Estate practice and leads on Turkish client transactions, combining deep market knowledge with strong commercial insight. In her new role as partner, she will continue to strengthen the firm’s real estate offering, heading Turkish client transactions and supporting clients on complex, cross-border matters. Her promotion reflects both her technical expertise and her significant contribution to the firm’s growth.

Her appointment reflects both her technical expertise and her significant contribution to the firm’s growth.

If you’d like to discuss how Nargiz and her team can assist you in residential real estate matters, whether UK-based or international, please contact her via her email, nabduallyeva@quastels.com or call +44 7799 277084.

Ben Gale, Corporate

Ben Gale has joined Quastels as a partner in the Corporate team, bringing extensive experience advising a broad range of clients, from entrepreneurial businesses to established corporates, on UK and cross-border matters.

His practice covers mergers and acquisitions, private equity and venture capital transactions, joint ventures, restructurings and general corporate advisory work. Ben has particular sector expertise in retail, hospitality and leisure, the testing, inspection, certification and compliance (TICC) sector, and the fast-growing online prize draws and competitions (PCD) space. 

Ben joins the firm from Irwin Mitchell and is highly regarded for his commercial focus, responsiveness and ability to drive transactions forward under demanding timeframes. He was recently shortlisted for Corporate Lawyer of the Year at the Insider Media South-East Dealmakers Awards, reflecting his strong market standing and dedication to client service.

If you’d like to discuss how Ben and his team can assist you in corporate matters, please contact him via his email, bgale@quastels.com or call +44 7341 590470.

Charlotte Vallins, Commercial Property

Charlotte Vallins has joined Quastels as a partner in the Commercial Property team. Specialising in commercial real estate for private and institutional investors in relation to freehold and leasehold acquisitions, disposals and financings of all complexity, she brings more than 15 years’ experience.

Charlotte joins Quastels from a large regional firm and is known for her proactive, pragmatic and client-focused approach. She is recognised for her attention to detail, clear communication and ability to deliver timely, commercial results. Charlotte is also listed as a Next Generation Partner in Legal 500, where she is praised for her professionalism, depth of knowledge and outstanding client service.

Her appointment further strengthens Quastels’ Commercial Property offering and reinforces the firm’s commitment to delivering high-quality, commercially focused advice.

If you’d like to discuss how Charlotte and her team can assist you in commercial property matters, whether UK-based or international, please contact her via her email, cvallins@quastels.com, or call +44 7351 590460.

Looking Ahead

The promotion of Nargiz and the appointments of Ben and Charlotte represent an exciting chapter for Quastels as the firm continues to build depth across its core practice areas. Together, they enhance the firm’s ability to support clients with complex, high-value and strategically important matters, both in the UK and internationally.

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The Digital Markets, Competition and Consumers Act 2024: What Your Business Needs to Know

The Digital Markets, Competition and Consumers Act 2024 (“DMCC ACT“) is widely regarded as the most significant overhaul of UK consumer protection and competition law since the Consumer Rights Act 2015. The DMCC Act introduces wide-ranging reforms to digital markets, competition enforcement and consumer protection. Although the Competition and Markets Authority (“CMA“) has suggested it will offer businesses some initial breathing room to adjust to the changes, organisations need to understand how the rules are changing and where they may need to proactively adapt.

What does the DMCC Act do?

While the DMCC Act contains a number of key pillars of reform, the one that is likely to be key for most businesses is the reform to consumer protection. The DMCC Act introduces stronger enforcement powers for the CMA, including direct penalties and new rules around unfair commercial practices, hidden fees (drip pricing), fake reviews and subscription traps. These changes are consumer-facing and are where businesses of all sizes are most likely to feel immediate impact.

CMA’s Direct Enforcement Powers

For the first time, the CMA can investigate and penalise consumer law breaches through administrative proceedings, bringing consumer protection enforcement into closer alignment with its existing competition law powers. It can now impose substantial financial penalties without going through the courts, including up to 10% of global annual turnover (or £300,000, whichever is greater) for consumer protection breaches. These penalties are split into categories reflecting different types of infringement, ranging from procedural or investigatory failures to non-compliance with CMA directions. These powers apply to a broad range of existing consumer protection legislation, much of which has now been consolidated in the DMCC Act.

Although there is no formal statutory grace period, the CMA has indicated it will focus initially on more serious breaches. Businesses must therefore treat compliance as a priority, rather than a simple operational tick-box exercise.

New Consumer Protection Requirements

The new consumer protections that businesses must address include:

Drip Pricing

All pricing information must now display the total upfront cost in adverts and product listings, including any booking fees, taxes, delivery charges or other payments that the consumer will incur. If there are charges that cannot reasonably be calculated in advance these can be excluded from the headline price but nonetheless must be clearly disclosed. Hidden mandatory fees are a key risk area that the CMA is actively policing.

The CMA’s guidance gives the example that if a gym membership is subject to a minimum contract term of six months, then the advertised price must set out the total six-month cost, not just the monthly fee.

Fake Reviews

Publishing or facilitating fake or misleading reviews is banned. Crucially, the DMCC places a positive obligation on traders to take “reasonable and proportionate steps” to prevent fake reviews from appearing on their platforms.

Businesses that use the online platforms or digital marketing will need to implement checks on reviews alongside clear terms of engagement in order to demonstrate it is actively preventing and removing fake reviews.

The CMA permitted a 3-month adjustment period to enable businesses to digest the guidance, which concluded earlier this month, and since then it has completed a website review of more than 100 businesses including Viagogo, StubHub, AA Driving School and Wayfair. It found that more than half of the businesses investigated may be failing to comply with the guidance.

Subscription Contracts

Rules about consumer subscriptions were due to come into force in Spring 2026, but it is expected that this may be pushed back by a further 6 months. Once in place, businesses offering subscription services will face additional requirements designed to combat “subscription traps”. These include:

• providing clear information about pricing, auto-renewals, and cancellation methods after trial periods before consumers enter contracts;
• issuing reminders before free or discounted trials end; and
• ensuring clear and straightforward cancellation procedures and renewal terms.

The obligations will become implied terms of consumer contracts and will give consumers additional cancellation rights if traders fail to comply.

Implications for Businesses

Consumer-facing business models are under new and heightened scrutiny, particularly where online platforms, digital marketing, subscriptions or renewal models are used. Consumer protection has been elevated, therefore businesses must ensure their terms of sale (including terms covering subscription/cancellation/refunds) comply with the new rules.

In relation to M&A, the enhanced review powers coupled with greater willingness from the CMA to intervene, mean that businesses engaging in M&A must consider the broader digital market context when carrying out its due diligence exercise.

Although the CMA has indicated it will initially focus on and prioritise more egregious breaches, it is clear that it intends to act swiftly and stop unlawful conduct. The CMA may also consider previous conduct when setting monetary penalties, especially where the business has been non-compliant with CMA enforcement in the past.

How Can Businesses Prepare?

1. Conduct an audit – look at your business’s digital activities, consumer facing interfaces and subscription or renewal models. Review and update contracts, terms and conditions, cancellation processes and pricing structures to reflect clearer transparency and comply with the new rules on hidden fees;
2. For online platforms, implement review controls and detection methods for fake reviews, and consider documenting these procedures to demonstrate active compliance;
3. Prepare for the new subscription rules – if your business offers subscriptions, begin preparing now ahead of the new subscription requirements to ensure a smooth implementation;
4. For M&A deals, incorporate DMCC Act checklists into the due diligence exercise and consider broader competition law implications; and
5. Monitor upcoming guidance and secondary legislation – the CMA has published, and is continuing to publish, helpful guidance materials so that businesses can prepare. Many rules are still in the process of being rolled out so now is the time to seek clarification if anything is unclear.

Conclusion

The DMCC Act represents a fundamental change in the UK’s consumer law and digital markets landscape. The CMA now has the power and the resources to take swift and decisive action against businesses that fall short of their consumer law obligations.

For businesses, this shift brings greater penalties for non-compliance but also greater rewards for transparency and fair dealing. Organisations operating in the UK market should act now to review existing practices and strengthen internal governance. The regulatory environment is changing, and businesses that adapt now will be far better placed to grow and build consumer trust in this new era.

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