CMA launches first enforcement cases using new consumer law powers

The CMA has announced that it is investigating eight companies – driving schools run by BSM and the AA; fitness firm Gold’s Gym; homeware retailers Wayfair, Appliances Direct, and Marks Electrical; and secondary ticketing sites StubHub and viagogo – to examine whether their online pricing and sales practices may have infringed consumer protection rules that prohibit “unfair commercial practices” (UCPs) such as ‘drip pricing’ and pressure selling.  The investigations mark the first time the agency has used its new direct enforcement consumer law powers that were introduced by the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) and came into force in April this year.

Since April, the CMA has conducted a “major cross-economy review of more than 400 businesses in 19 different sectors to assess compliance with the rules on price transparency”. Through this review the CMA identified potential compliance concerns in 14 sectors, including practices such as drip pricing – where consumers are shown an initial headline price for a good, service or digital product and additional mandatory charges are introduced, or ‘dripped’, later in the checkout process; the use of misleading countdown timers as a form of pressure selling; and default opt-ins, where customers are being automatically opted into purchasing additional services.

Alongside the eight new consumer law investigations, the CMA also issued warning letters to a further 100 firms warning them about their business practices. The 14 sectors targeted include areas it had previously scrutinised, such as package holidays, online vouchers, fashion and live event ticketing.

Angelique Bret, a competition and consumer law expert at Pinsent Masons, said: "The fact that the CMA has simultaneously opened eight consumer protection investigations across several industry sectors, covering a range of UCPs, demonstrates that the CMA is serious about using its new powers under the DMCC Act.”

“The announcement of multiple formal investigations and the scale of work the CMA appears to have already carried out behind-the-scenes is notable.  It is an important reminder for businesses to ensure that they are complying with consumer protection rules to mitigate their risk of potential CMA enforcement investigation which can result in fines up to 10% of global turnover as well as possible fines for individuals. Businesses that receive CMA warning letters must take them seriously and promptly address the concerns raised or otherwise face an elevated risk of CMA enforcement action.”

She added: “The new investigations are also consistent with earlier CMA announcements and publications highlighting consumer protection enforcement as an important part of its work to help deliver economic growth and investment in line with the UK government's Strategic Steer”.

The CMA explained that consumers need accurate pricing information to know if they are getting a fair deal. This is important for consumer confidence when shopping online and in turn impacts economic growth.

Tadeusz Gielas, a competition and consumer law expert at Pinsent Masons, said: “The selling practices targeted by the CMA’s new enforcement drive were already unlawful under the pre-existing consumer protection rules – Consumer Protection from Unfair Trading Regulations 2008 (CPRs) – and had previously attracted CMA scrutiny. For example, in recent years the CMA examined online choice architecture (OCA) to tackle potentially harmful online selling practices and has taken enforcement action against Emma Sleep, Wowcher, and Simba Sleep. The Emma Sleep enforcement action is heading for court trial next year. However, going forward, the CMA can impose fines for these types of practices.”

“Whilst drip pricing was already unlawful under the CPRs, the UK government sought to target the practice more directly through DMCC Act reforms after identifying concerns about the prevalence of online drip pricing in certain sectors and the detriment it may cause to consumers,” he said.

Drip pricing practices, as well as ‘partitioned’ – where the mandatory components of a price are given without providing an overall total price – are explicitly prohibited under the DMCC Act, unless the total price cannot reasonably be calculated in advance. This is covered by a specific UCP provision concerning “omission of material information from invitation to purchase” contained in section 230 of the DMCC Act which stipulates that all unavoidable fees – such as booking, delivery, resort, and local taxes – must be included in the headline price from the outset.  Section 230 also imposes other legal requirements, such as specifying the trader’s identity and address, however the CMA’s current focus is on the new pricing transparency obligations.

Alongside launching new enforcement action and issuing warning letters, the CMA also published the final version of its new price transparency guidance, on which it consulted extensively with stakeholders earlier this year. It has also issued further new guidance on how businesses should obtain consent for additional charges when selling online. The CMA’s separate flagship UCP guidance has also been updated to take into account the detailed new price transparency guidelines.

Across the eight new investigations the CMA is examining whether firms 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.

AA Driving School and the BSM driving school have been targeted specifically over the way mandatory fees are shown to consumers and whether they are disclosed at the start of the purchase process.

Gold’s Gym is being investigated over whether the way it presents a one-off joining fee for annual membership is in breach of the law.

StubHub.co.uk and viagogo are under review for mandatory additional charges added when consumers purchase tickets through them.

Homeware retailer Wayfair is being investigated over whether time-limited sales end when the company claims they would, as is Appliances Direct, which – like Marks Electrical – is also being investigated over the use of default opt-ins to purchasing additional services.

The CMA said it expects to give an update on all eight cases in March next year as its respective investigations develop, but at this point it had reached no conclusions about whether consumer protection rules have been infringed in any of these instances. The outcome of the respective investigations will depend on the evidence the CMA obtains and could result in a finding of unlawful conduct, the imposition of remedies and/or fines, or closure of the case.

Bret said: “How the CMA carries out and progresses its eight consumer law investigations will be closely watched by businesses, legal practitioners, and other stakeholders. These cases will provide us with important insights into how the agency applies its new powers in real-life cases.”

CMA chief executive Sarah Cardell said the investigations were about ensuring consumers could shop with confidence, knowing that the price they see is the price they will pay and that any sales are genuine. 

She added: “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.”

Days after announcing its new consumer law investigations and updated guidance, the CMA launched its strategy for 2026-2029. The strategy is structured around five principal objectives, one of which is devoted to “championing consumers” – confirming that consumer protection enforcement will remain a key CMA focus area for years to come.