The Competition and Markets Authority (CMA) has launched a major consumer protection drive focused on online pricing practices, opening investigations into eight businesses – including homewares retailer Wayfair – while issuing advisory letters to 100 firms and publishing its finalised guidance for businesses.
Wayfair has been targeted in relation to time-limited sales – whether its sales ended when the company said they would. Investigations have also been opened into StubHub, viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Appliances Direct and Marks Electrical.
The CMA has announced the major package of action covering online pricing practices, including drip pricing and pressure selling, under the new Digital Markets, Competition and Consumers Act 2024 (DMCCA), to "ensure people can shop with confidence and fair-dealing businesses can compete on a level playing field".
Since April, the CMA has been conducting a major cross-economy review of more than 400 businesses in 19 sectors to assess compliance with the rules on price transparency. Using the results of this review, alongside additional monitoring, the CMA 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 investigations launched by the CMA are the first enforcement cases opened using its new powers, which enable it to decide whether consumer laws have been broken, rather than having to go through the courts. If the CMA finds there has been an infringement of the law, it can order businesses to pay compensation to affected customers as well as fining companies up to 10% of their global turnover.
The CMA has already taken significant action regarding ‘Online Choice Architecture’, which sought to tackle potentially harmful online selling practices, including enforcement action against Emma Sleep, Wowcher, and Simba Sleep.
Sarah Cardell, chief executive of the CMA, says: "At a time when household budgets are under constant pressure and we’re all hunting for the best deal possible, it’s crucial that people are able to shop online with confidence, knowing that the price they see is the price they’ll pay, and any sales are genuine. Whether you’re spending your hard-earned cash on concert tickets or driving lessons, joining a gym or buying furniture and appliances for your home, you deserve a fair deal.
"It’s our job to protect consumers from misleading prices and illegal pressure selling and today marks an important milestone as we take action across the economy to make sure businesses do the right thing by their customers.
"Since the launch of the new regime, we’ve been working hard to help businesses understand the law. But alongside supporting businesses to comply, we’ve always been clear that we will take swift action where we suspect potentially serious breaches of the law.
"This is just the start of our work. Any businesses who break consumer law should be in no doubt we will stamp out illegal conduct and protect the interests of consumers and fair-dealing businesses."
At this stage, the CMA has reached no conclusions about whether the law has been broken in any of the investigations described.
