CMA doubles down on pricing transparency to protect consumers

The new draft guidance has been published for consultation just three months after the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) significantly boosted the CMA’s consumer law enforcement powers – placing them on a par with competition law enforcement – and strengthened the UK’s overall consumer protection regime.

Following an earlier public consultation that took place between December 2024 and January 2025, on its then-new draft unfair commercial practices (UCPs) guidance, the CMA said in its approach document that it would adopt a “phased approach” to issuing guidance to help businesses comply with new or expanded UCP provisions contained within the DMCC Act.

In particular, the wider guidance on UCPs (UCP guidance) which the CMA finalised and published in April 2025, did not provide detailed coverage of “drip pricing” – where consumers are shown an initial headline price for a product (a good, service or digital content) and additional mandatory charges are introduced, or "dripped” later in the checkout process – and committed to running a further consultation on other aspects of the practice later this year.

The new draft guidance on price transparency seeks to address extensive stakeholder feedback received by the CMA during its earlier consultation. It attempts to use case studies and illustrations to demonstrate how traders can comply with the new rules. Once finalised, the new price transparency guidance will supplement and amend aspects of the UCP guidance and will also complement the CMA's recent dynamic pricing update.  

It focuses on a specific UCP provision concerning “omission of material information from invitation to purchase” contained in section 230 of the DMCC Act. Under this provision, 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230 also imposes other legal requirements – such as specifying the trader’s identity and address – however the CMA’s draft guidance focuses on new pricing transparency obligations.

“Drip pricing” practices, as well as “partitioned pricing” – where the mandatory components of a price are given without providing an overall total price, are now explicitly prohibited under the DMCC Act –

unless the total price cannot reasonably be calculated in advance. The draft guidance explains “… if, because of the nature of the product, the price (or a part of it) cannot reasonably be calculated in advance, the invitation to purchase must include information that enables the consumer to calculate the non-calculable (parts of the) price. That information must be provided with as much prominence as the part of the total price that is calculable in advance.”

Businesses that breach these rules could face monetary fines of up to 10% of their global annual turnover. Individuals who are accessories to an infringement may be fined up to £300,000. “Consumer law compliance should now be an important focus for businesses that sell or market to UK consumers,” said Angelique Bret, a competition and consumer law expert at Pinsent Masons.

The draft price transparency guidance outlines what is meant by an "invitation to purchase" – including online and offline adverts, menus in restaurants (physical or QR-code accessible), in-app banners, and in-store display pricing – and seeks to clarify what constitutes a “realistic, meaningful and attainable” price. This concept is used to assess whether a price is misleading when making invitations to purchase and the CMA provides concrete examples of both compliant and non-compliant practices.

The regulator also explains how traders should market their pricing where the total cost cannot reasonably be calculated in advance – for example because the product is bespoke or charged by unit of measurement such as time, distance, weight and volume. The draft guidance sets out a structured approach for such scenarios, requiring traders to provide sufficient information to enable consumers to calculate the total price themselves. It states that such information must be provided with as much prominence as the part of the total price that is calculable in advance.

The draft guidance also expands on how specific types of charges should be handled, clarifying how “mandatory” and “optional” charges should be distinguished in different contexts, offering detailed case studies on per-transaction fees, delivery charges, local taxes and periodic pricing. It also explains how to present prices for rolling versus fixed-term contracts and how to handle charges that are payable to third parties or in foreign currencies.

Bret said that consultation paper will be particularly relevant to sectors where pricing is complex, layered, or varies depending on consumer choices or circumstances. These include online retail, where delivery fees, packaging charges, or platform service fees are added late in the purchase journey. “Businesses will need to ensure that all mandatory charges are included in the headline price from the outset, even in early-stage advertising,” she said. 

Car hire and transport providers will need to refrain from using low base prices that exclude mandatory pick-up fees or insurance. Ticketing and events businesses will need to include booking and admin fees in the advertised price – not merely adding them at checkout. Bespoke service providers such as removals, home improvement, or photography services will need to ensure that indicative pricing is realistic, meaningful and attainable, and that once a total price becomes calculable, it is presented clearly and prominently. 

In the travel and hospitality sectors, where the use of resort fees, local taxes, and variable pricing based on dates or occupancy is widespread, the guidance makes clear that traders will need to ensure the total price is shown to consumers whenever possible and that "indicative" pricing is appropriately used for components of the total price that cannot be calculated in advance – even if fees are payable locally or in a foreign currency. The draft guidance also notes that automatically refundable deposits, or holds on a consumer’s payment card, such as those which may be taken when checking into a hotel, would not be considered mandatory charges and do not need to be included in the headline total price.

The draft guidance also covers periodic pricing in subscription contracts. It clarifies that subscription-based services – such as gyms, telecoms, and digital platforms – must clearly present either the total monthly price of a good or service with the contract term, or the total cumulative price over the entire minimum length of the contract, including any one-off joining or setup fees.

The CMA explains that contracts which have to be paid upfront in full are not periodic contracts, even if the price relates to the provision of a service over a period of time, and the total price for the service must be included in the invitation to purchase. For example, if a trader advertises a discounted 3-month gym membership requiring full upfront payment, including the joining fee, the total price must be clearly stated. Likewise, where a consumer is able to pay for a product (e.g. furniture) in monthly instalments, the “total price” of the product must be disclosed, not the cost of the monthly instalments.

Clare Francis, a commercial law expert at Pinsent Masons, said: “To ensure compliance businesses will need to review their customer journey and sales processes to ensure they meet the new guidance. This will involve working with marketing and website teams to ensure compliant changes are implemented. This work needs to be planned and factored in around IT freezes during busy sales periods.”

Tadeusz Gielas, a competition and consumer law expert at Pinsent Masons, said: “The DMCC Act also created separate consumer protection rules for subscription contracts, distinct from the UCP provisions, which stipulate information requirements and cooling-off and cancellation rights for consumers. Whilst those additional rules are not expected to come into force until spring 2026 at the earliest, the CMA’s new draft guidance indicates how subscription contracts may also need to comply with price transparency obligations in section 230 of the DMCC Act which are already in force.”

Although the draft guidance recognises certain limitations imposed by different communication formats – such as radio ads or small digital banners – it states that traders must also find ways to present total pricing information clearly and prominently. The CMA also provides guidance on targeted price reductions, such as discounts for specific consumer groups, but warns that such offers must not be presented in a way that misleads other consumers, reinforcing the broader theme of transparency and fairness.

The consultation runs until 8 September. In line with its ubiquitous "4Ps" framework, which focuses on ‘pace’, ‘predictability’, ‘proportionality’ and ‘process’, the CMA is also engaging with stakeholders through webinars and workshops. The regulator expects to finalise the new price transparency guidance in autumn this year.