The Competition and Markets Authority (CMA) has finalised its price transparency guidance under the Digital Markets, Competition and Consumers Act 2024 (DMCCA) and updated its guidance on unfair commercial practices (UCPs) to reflect the new rules.
The price transparency guidance is significant as it explains how businesses should apply and interpret the DMCCA’s new pricing obligations within the UCP framework. It applies broadly to anyone who advertises, markets, sells, or otherwise promotes products to consumers at any stage of the purchasing journey, from early advertising through to final purchase.
In today’s article, we highlight some of the key elements of the guidance relating to invitations to purchase.
Invitation to purchase
The guidance confirms that an “invitation to purchase” arises whenever a business provides consumers with information about a product together with its price. Where this threshold is met, the communication falls within the scope of the UCP rules.
A common misconception addressed is that an invitation to purchase only exists once a consumer is ready to buy, or where a transaction can be completed. In reality, an invitation to purchase can arise much earlier in the customer journey and does not need to include a purchasing option. Simply presenting a product alongside its price can be sufficient. For example, a poster advertising a product and its price will still be an invitation to purchase, even if it does not explain where or how the product can be bought.
By contrast, advertising that does not include a price or does not refer to the key characteristics of a specific product, such as general brand advertising, will fall outside the definition of an invitation to purchase, and the price transparency requirements will not apply.
Where an invitation to purchase is directed at UK consumers, it must comply with the UCP provisions even if the trader making the invitation is based outside the UK.
Who is responsible?
Responsibility for compliance with the DMCCA rests with the trader making the invitation to purchase, as well as any trader on whose behalf the invitation is made. This may include brand owners advertising products sold by third-party retailers, price comparison websites, online marketplaces, and influencers.
In online marketplace contexts, responsibility may sit with more than one party. Both the seller and the marketplace operator may be held liable where an invitation to purchase does not meet the legal requirements. Traders that rely on third parties to market or sell their products should therefore ensure that those parties are provided with all information required under the DMCCA and are complying with their own obligations.
What pricing information must be included?
Pricing information must be presented in a way that is not misleading. This means the price shown must be realistic, meaningful, and genuinely available for the product being advertised.
In particular, the invitation to purchase must include the total price payable, incorporating all mandatory fees, taxes, and charges. An exception applies only where the total price cannot reasonably be calculated in advance due to the nature of the product or service. This may arise where the final price depends on unknown variables, such as services charged based on actual usage (for example, utilities).
By contrast, charges such as administration, booking, or service fees that apply across multiple products will rarely qualify for this exception. In those cases, traders are expected to structure or present their pricing so that such charges can be calculated in advance and included in the total price, for example, advertising a concert ticket at £55 rather than £50 plus a mandatory £5 booking fee.
The guidance also emphasises that “from” prices must be realistic. For example, a zoo advertises tickets “from £12”, but that price applies only to children under 10, while adult tickets cost £25. As children under 10 are unlikely to attend alone, advertising the £12 price without clearly stating that it applies only to child tickets is unlikely to be realistic for most consumers and may therefore be misleading.
Delivery charges and presentation of pricing
The guidance distinguishes between mandatory delivery charges, optional delivery charges, and delivery charges that are variable but still mandatory.
Mandatory delivery charges must be included in the total price, including at early stages of advertising.
Optional delivery charges (eg where there is also a free collection option) must be provided in an invitation to purchase but do not need to form part of the total price and may be indicated separately.
Where delivery charges are mandatory but variable, traders must clearly state that delivery charges apply and explain how those charges will be calculated. The information provided must be sufficient to allow consumers to work out the total price themselves, including the mandatory delivery charge, and must be presented with the same level of prominence as the elements of the price that can be calculated in advance.
Restrictions and “from” prices
Any restrictions on availability must be clearly disclosed. “From” prices are only acceptable where a meaningful proportion of products are genuinely available at that price. While limitations of the advertising medium (such as space or time constraints) may sometimes justify omitting certain details, the CMA stresses that price information should rarely be omitted given its importance.
Consent for optional extras
Where traders offer optional add-ons in connection with a main product, such as insurance, faster delivery, or charitable donations, they must obtain the consumer’s express consent before charging for those extras. This means that automatic opt-in mechanisms, including pre-ticked boxes, are prohibited.
Drip pricing and partitioned pricing
The guidance makes clear that “drip pricing”, i.e., the practice of presenting an initial headline price and then introducing additional mandatory charges later in the purchasing process, is prohibited under the UCP provisions.
For example, a hotel advertises a room at £100 per night. A consumer selects a two-night stay and is shown a total price of £200. After navigating through optional extras, the consumer is then informed of a mandatory £25 per-night weekend surcharge, increasing the total price to £250. This practice would constitute prohibited drip pricing.
The DMCCA also effectively prohibits partitioned pricing, where traders present the individual components of a price without providing an overall total. Where a price consists of multiple components, those elements must be added together and shown as a total price in the invitation to purchase. It is not sufficient to list the components and expect the consumer to calculate the total themselves.
Where, due to the nature of the product, some elements of the price cannot be calculated in advance, traders should present a headline price that includes all calculable components. Any remaining charges must be disclosed with equal prominence.
If your organisation sells online, now is the time to act
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