CMA launches Consumer Protection drive on Online Pricing Practices

What's happened?

The CMA has announced that it is investigating eight UK businesses – including StubHub, Viagogo, Wayfair, Gold's Gym and AA Driving School – over their potentially misleading online pricing practices.
 
Some of the key issues flagged by the CMA are:

• Drip-pricing, where advertised prices excluded mandatory fees that only become visible later in the checkout process;
• Automatic opt-ins to additional services; and
• Pressure-selling tactics like time-limited sales and countdown timers.

In addition to the 8 investigations, the CMA has issued advisory letters to 100 businesses across 14 different sectors aligned with key areas of consumer spending such as live ticket events, holidays, and food and drink delivery companies. This signals that the CMA's enforcement action is not limited to just a few bad actors, and that all retailers should be viewing their compliance with the new obligations imposed by the DMCCA (defined below) as a matter of priority.

Why it matters

The investigations form part of a wider "package of action" announced by the CMA and are backed by the CMA's new enforcement powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA).
 
The CMA is now able to take action and decide whether consumer laws have been breached without going through the courts, and has the ability to impose fines of up to 10% of global turnover. Non-compliant businesses may additionally be required to compensate customers.

New Price Transparency guidance

In addition to the investigations announced, the CMA has published its final guidance on unfair commercial practices relating to price transparency: Price transparency: CMA209. The guidance covers what to include in your pricing information, as well as addressing practices like drip-pricing and partitioned pricing.

Key takeaways and actions

Now is a good time to:

• Review the CMA's updated guidance and audit your online checkout and pricing strategies. In particular, check:
  • Are mandatory fees included in the initial price shown to customers?
  • Are customers presented with additional significant charges after the booking or selection stage?
  • Where you are using time-limited offers, do these end within the specified period?

• Ensure you have documented your approach to pricing and compliance. In the event that the regulator comes knocking, good record-keeping could make all the difference.
• Seek advice. If you're unsure whether your pricing practices comply, feel free to get in touch now so that we can help you identify and manage any risks.