CMA Launches Major Consumer Protection Drive on Online Pricing

The Competition and Markets Authority (CMA) has announced a number of actions it is taking to improve price transparency and tackle misleading online sales practices. This is the first major use of its new powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which came into force earlier this year.

The CMA has conducted a cross-economy review of more than 400 businesses in 19 sectors. The review highlighted concerns in 14 sectors, particularly around drip pricing and the use of misleading countdown timers.

Focus on online pricing practices

The CMA has opened investigations into eight named businesses due to concerns about a lack of transparency over additional fees, the use of misleading time-limited offers and automatically opting customers into optional charges.

The businesses under investigation are StubHub, viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Wayfair, Appliances Direct and Marks Electrical. At this stage, the CMA has not reached any conclusions as to whether consumer law has been breached.

These investigations are the first to use the CMA’s strengthened consumer enforcement powers. These new powers allow the CMA to determine breaches itself rather than going through the courts. Where appropriate, the CMA can impose fines of up to 10% of global turnover and order compensation be paid to affected consumers.

Wider compliance concerns across the economy

Based on their compliance review, the CMA is also sending advisory letters to 100 businesses across a wide range of consumer-facing industries, including travel, transport, homeware, fitness, event tickets, delivery services, fashion and online voucher providers.

These letters put the recipient businesses on notice to review their pricing and sales practices and bring them into line with the law and the CMA’s guidance.

The CMA has said it will continue to engage with these businesses and may take further enforcement action if problems persist.

New guidance on price transparency

Alongside this enforcement activity, the CMA has published finalised guidance to help businesses understand and comply with the rules on price transparency.

While the DMCCA introduces new obligations, many forms of drip pricing have been prohibited for years under earlier consumer protection legislation. These include failing to include compulsory charges in the headline price or introducing unavoidable fees only at checkout.

The new guidance aims to clarify expectations around transparent pricing, the presentation of fees, the use of sales claims and other online selling practices.

Next steps

There is no fixed legal deadline for the CMA to conclude its investigations. Cases may lead to formal findings of unlawful conduct, remedies or, in some instances, closure without further action.

Given the scale of the review and the strength of the CMA’s new powers, further enforcement activity seems likely.

If you sell to customers online, it may be worth treating this as an opportune time to review your pricing information to ensure it complies with the new guidance.

To review the price transparency guidance, see: https://www.gov.uk/government/publications/price-transparency-cma209