The Digital Markets, Competition and Consumers Act 2024 was introduced last year and made significant changes to the UK’s competition and consumer landscape. As part of the reforms, the Competition and Markets Authority (CMA) was given greater powers to tackle anti-competitive behaviours independently without assistance from the courts.
The CMA’s First Investigations
Since April 2025, the CMA has been busy conducting a major review of more than 400 businesses in 19 different sectors to assess compliance with rules on price transparency. Following the review, the CMA has identified practices such as drip pricing and misleading countdown timers amongst other issues which are banned under the new regime.
The eight companies and their suspected infringements are:
- StubHub and viagogo – under review for the application of additional charges at checkout and whether or not these mandatory fees are included upfront;
- The AA Driving School and BSM Driving School – under investigation over how they present mandatory fees and in particular whether these fees are included as part of the total price that consumers see when starting their purchase;
- Gold’s Gym – is being reviewed in respect of their one-off joining fee for its annual membership and whether this is being advertised as part of the membership cost or if it is being included part way through the sign-up process;
- Wayfair, Appliances Direct and Marks Electrical – under scrutiny for conduct around time-limited sales, particularly whether they ended on time and separately whether customers are being automatically opted in to purchase additional services.
The investigations are ongoing, with the CMA reviewing further evidence to determine whether there are reasonable grounds to suspect a breach of the consumer protection rules.
100 Businesses Subject to Advisory Letters
Other businesses are being met with advisory letters which put them on notice of the CMA’s concerns over their online selling tactics and drip pricing. These letters have gone out to businesses spanning a number of sectors, including holidays, fashion, cinemas, driving schools, homeware, food and drink delivery, public travel and more.
As part of this process, the CMA is looking to engage with businesses in an attempt to avoid future enforcement action. Businesses are encouraged to review the CMA’s latest guidance on price transparency.
Drip Pricing Recap
Drip pricing refers to hidden fees which are not included in the purchase price advertised to consumers but are later added as part of the check out process. This sales tactic lacks transparency and takes advantage of the consumer already being committed to making the purchase. This kind of practice is banned under the Digital Markets, Competition and Consumers Act 2024 and is one the items which we are seeing the CMA crackdown on.
Potential Consequences of Enforcement Action
If the CMA determine a company is in breach of the price transparency rules, it could impose a fine of up to 10% of the company’s annual global turnover. Businesses should therefore be mindful of their sales tactics and review their policies to ensure they are compliant.
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