The CMA has started a package of action covering online pricing practices, including drip pricing and pressure selling, under the Digital Markets, Competition and Consumers Act 2024.
Since April, the CMA has been conducting a major cross-economy review of more than 400 businesses in 19 different sectors to assess compliance with the rules on price transparency. It identified potential compliance concerns in 14 sectors, including drip pricing and the use of misleading countdown timers, which are banned under the new regime.
The CMA is taking a two-tier approach based on this work: launching enforcement action and sending advisory letters to 100 businesses; and also publishing new guidance for businesses to help them comply with the law.
Investigations
It is investigating eight businesses that it has reason to suspect have infringed consumer law in relation to their use of fees, use of misleading time-limited offers and/or the practice of automatically opting consumers in for optional charges. At this stage, the CMA has reached no conclusions about whether the law has been broken in any of these investigations.
New guidance
It has also issued new guidance on price transparency following a consultation last year. It covers what to include in your pricing information (including mandatory fees, taxes and charges), ‘drip pricing’ (this is when prices are added as consumers proceed with a transaction) and ‘partitioned pricing’ (this is when component parts of a price are given, but the overall price a customer would pay is not).
In addition, it has issued updated guidance on unfair commercial practices which reflects the updated guidance on price transparency.
And finally, it has published guidance on getting consent for additional charges when selling online. Consumers must have genuine choice over whether to pay for an extra product or service they may or may not wish to choose. You can’t use pre-ticked boxes or other forms of automatic opt-in for optional extras, if that means the customer will have to pay for them unless they take action to opt out. Traders must: clearly explain any additional payments that consumers can choose to make; make sure that customers expressly consent to additional payments before they are charged; and give customers a way to check and confirm what they are paying for. A customer can’t provide express consent by not changing a default option, for example by not removing a tick from a pre-ticked box nor opting out of an extra, for example if they are required to tick a box to avoid paying.
