Great Britain: Consultation on price transparency guidance for online shops

 

The UK Competition and Markets Authority’s (CMA) is currently conducting a public consultation on draft guidance for businesses on the price transparency provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act).

The DMCC Act is relevant for all businesses selling their products online in the UK.

The draft guidance details:

• what an invitation to purchase is
• what pricing information needs to be included in an invitation to purchase (and what to avoid including ‘drip’ and ‘partitioned’ pricing)
• what traders need to do to ensure they are complying with the new requirements to provide the total price of the product in their invitations to purchase, and what they need to do instead if this is not possible
• how the new requirements apply to specific types of charges and pricing practices and the steps that traders can take to ensure they are complying with the new requirements

All these issues are of utmost importance to ensure compliance of an online shop.

The guidelines can be summarized as follows:

• Consumers should be given the information they need to make informed decisions, shop around and compare the prices of competing products.
• When a trader gives information to consumers about a product and its price, this will normally be an ‘invitation to purchase’.
• Prices must not be misleading and should include any fees, taxes, charges or other payments that the consumer will necessarily incur if the consumer purchases the product.
• Drip pricing – the prohibited practice of showing consumers an initial headline price for a product which is not a total price (for example, where additional mandatory charges are introduced as consumers proceed with a purchase process or transaction).
• Partitioned pricing – the practice of providing a breakdown of fees and charges without also providing the total price, which should only be used in invitations to purchase where the total price cannot reasonably be calculated in advance.

The background of the guidelines is following:

When a trader provides consumers with information about a product and its price, this typically constitutes an invitation to purchase. Such invitations are important because consumers rely on clear and timely pricing information to make informed decisions—understanding how much a product will cost helps them determine which product best suits their needs and where to buy it.

When businesses fail to display prices accurately or omit essential pricing details, products can appear cheaper than they actually are. This can mislead consumers, damage trust, and distort fair competition between businesses. Transparent pricing is therefore essential—not only does it protect consumers, but it also supports healthy competition and benefits the wider economy.

The Digital Markets, Competition and Consumers Act 2024 (DMCC Act) updated the laws that protect consumers from unfair trading practices, specifically strengthening the Unfair Commercial Practices (UCP) provisions. These now include targeted rules addressing long-standing concerns about misleading pricing tactics. These tactics include:

• Drip pricing: advertising a low initial price, then adding mandatory fees later in the transaction.
• Partitioned pricing: breaking a price into components without clearly presenting the total cost.

While businesses have always had a responsibility to avoid misleading pricing, the new rules reinforce and expand previous requirements under the Consumer Protection from Unfair Trading Regulations 2008 (CPUTRs). Under the CPUTRs, the most harmful forms of drip pricing—such as adding fees only at the point of payment—were already prohibited. It was also well established that unavoidable charges had to be disclosed and reflected in headline prices. These principles were outlined in past CMA guidance and enforcement actions, especially in sectors like car rental, online hotel booking, and green home improvements. These same principles continue to apply under the DMCC Act and should already be familiar to businesses in these areas. Similar obligations also exist under other regulations, such as the Advertising Codes of Practice.

Under the updated UCP provisions, all invitations to purchase must now include specific material information, including pricing details—unless a limited exception applies. Importantly, businesses can be found in breach simply for failing to include this required information; there is no need to prove that consumers were actually misled.

The law makes it clear that traders must provide full pricing information throughout the entire purchase journey—from initial advertisements to the final payment page. Wherever feasible, consumers should see the total price upfront. Businesses are explicitly prohibited from presenting a low initial price and then introducing mandatory charges later in the process. If, due to the nature of the product, it is not possible to calculate the full price in advance, traders must explain how the price will be calculated, in a way that allows the consumer to work it out themselves.

These reforms aim to improve how prices are presented to consumers, increase transparency, and foster trust in markets. By making it easier for consumers to compare prices and ensuring they are not misled, the DMCC Act helps create a fairer, more competitive marketplace.

The public consultation can be found here: https://connect.cma.gov.uk/consultation-on-price-transparency-guidance

To find out more about compliance for online shops, please do not hesitate to contact the Product Compliance Institute directly.