CMA takes action on price transparency rules

Since April this year, the Competition & Markets Authority (CMA) has been carrying out an extensive review of more than 400 businesses across 19 sectors to scrutinise compliance with updated price transparency rules under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). Issues including drip pricing and the use of misleading countdown timers, both of which are banned under the new regime, were flagged in 14 of 19 sectors.

Consistent with the CMA’s stated approach of both supporting businesses to achieve compliance and addressing consumer harms, the CMA has recently published new price transparency guidance to help businesses understand and comply with the new rules and also initiated its first enforcement actions under the DMCCA in relation to non-compliant pricing practices.

Price transparency guidance

The guidance assists businesses in understanding how to present pricing to consumers in their advertising and sales processes in a compliant manner. Under the DMCCA, core pricing requirements include:

• Prices should not be misleading. The total product price should be shown at the outset wherever possible.
• ‘Drip pricing’ is prohibited (i.e. showing an initial headline price and introducing additional mandatory charges later in the sales process).
• ‘Partitioned pricing’ is generally prohibited (i.e. showing pricing for component parts without giving an overall total) except in some circumstances discussed in the guidance.
• Price presentation in invitations to purchase must not constitute an unfair commercial practice under the DMCCA or a breach of other relevant laws.
• Misleading reference pricing (e.g. for promotional offers) and practices such as bait and switch advertising are not permitted; however, these are not addressed in the guidance.

The guidance unpacks new rules with further explanation of these areas and offers information on each regarding how they are interpreted. For example, it addresses what constitutes ‘misleading’, which prices are ‘mandatory’, situations in which it is not possible to calculate the total price and common pricing mechanisms (e.g. ‘from’ pricing). It includes practical, illustrative examples of compliant and non-compliant pricing information from different sectors and provides detail on the presentation of specific charges, such as delivery charges, transaction charges, periodic payments and price reductions (e.g. introductory offers).

Enforcement: Investigations and advisory letters

The CMA is currently investigating 8 businesses, including Wayfair, AA Driving School, and BSM Driving School, that it considers may have infringed consumer law with their online pricing and sales practices. The possible infringements include ‘drip pricing’, and pressure-selling techniques include misleading time-limited offers and/or the methods of automatically opting consumers in for optional charges.

The investigations are ongoing, and the CMA expects to give an update on all 8 cases in March 2026. If the CMA determines that the rules have been infringed in any case, this may result in a finding of unlawful conduct and the imposition of remedies and/or fines.

In addition to these investigations, a further 100 businesses will receive advisory letters detailing the CMA’s concerns about those businesses’ use of additional fees and online sales tactics. This initiative targets sectors where the CMA’s pricing review revealed areas of concern, as well as key areas of consumer spending, including fashion, holidays, travel, leisure and hospitality, and delivery services. Combined, the targeted sectors serve tens of millions of UK consumers each year.

Recipient businesses will have to review their current practices and bring them in line with the DMCCA and related guidance or face enforcement action. The CMA will be engaging with these businesses to confirm compliance.

Compliant pricing practices for your business

Businesses dealing with consumers should now review their pricing structures, marketing, and customer journeys and ensure they are legally compliant. For instance, online traders should review price presentation, time-limited offers, and remove any automatic product additions in the sales process. Failure to comply with the DMCCA carries risks for businesses of maximum fines of up to 10% of their global annual turnover and up to 5% of global annual turnover for breached undertakings given to the CMA, with additional daily penalties for continued non-compliance.

From an internal operations perspective, businesses should ensure internal compliance training is updated to reflect the new rules and consider whether customer service, legal, compliance and commercial teams are properly equipped to handle communications and enquiries from the CMA. Failure to provide information when requested (without a proper reason), concealing evidence, or providing false information can also result in fines, with penalties of up to 1% of global annual turnover and additional daily penalties.

If you need advice on your marketing, sales, and pricing practices and how these changes impact your business, please get in touch with the consumer law specialists in our Commercial and Technology team at [email protected].