The Competition and Markets Authority (CMA) has announced a series of actions aimed at improving price transparency and addressing misleading online sales practices. This marks the first significant use of its new powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which came into force earlier this year.

The CMA carried out a cross-economy review involving more than 400 businesses across 19 sectors. Concerns were identified in 14 sectors, particularly relating to drip pricing and the use of misleading countdown timers.

Focus on Online Pricing Practices

The CMA has launched investigations into eight named businesses due to concerns about a lack of clarity around extra fees, misleading time-limited promotions, 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 undertaken using the CMA’s enhanced consumer enforcement powers. Under these powers, the CMA can determine breaches without court involvement. Where appropriate, it may impose fines of up to 10% of global turnover and require compensation to be paid to affected consumers.

Wider Compliance Concerns Across the Economy

Following the compliance review, the CMA is issuing advisory letters to 100 businesses across a range of consumer-facing sectors, including travel, transport, homeware, fitness, event ticketing, delivery services, fashion and online voucher providers.

These letters put businesses on notice to review their pricing and sales practices and ensure they align with legal requirements and CMA guidance.

The CMA has stated it will continue engaging with these businesses and may take further enforcement action if issues remain.

New Guidance on Price Transparency

Alongside the enforcement work, 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 existing consumer protection legislation. These include failing to include mandatory charges in the headline price or revealing unavoidable fees only at the checkout stage.

The newly issued guidance aims to clarify expectations regarding transparent pricing, fee presentation, sales claims and other online selling practices.

Next Steps

There is no statutory deadline for the CMA to conclude its investigations. Outcomes may include findings of unlawful conduct, the introduction of remedies, or closure without further action.

Given the scale of the review and the strength of the CMA’s updated enforcement powers, additional action across the market appears likely.

If you sell to customers online, this may be an ideal moment to review your pricing information to ensure it complies with the latest guidance.

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