Drip pricing is when an initial price for a product or service is presented to a consumer only for additional mandatory charges to be added to it further along the customer journey. The new Digital Markets, Competition and Consumers Act 2024 makes substantial changes to consumer law including to drip pricing law, requiring the "total price" to be provided upfront in consumer journeys. The Act has also given the Competition and Markets Authority ("CMA") the power to decide whether consumer protection law has been breached without having to take the business to court. The CMA can also now levy hefty fines for breaches of consumer law; up to 10% of a company's annual global turnover.
The changes to the law on drip pricing came into force in April this year. The CMA has indicated that enforcing the new law on drip pricing is a priority.
In April, following consulting on its new draft unfair commercial practices guidance, the CMA decided to take a phased (some might say dripped) approach to its guidance on the new "total price" requirement. This, we understand, was largely in response to business feedback to the consultation. The CMA issued a slimmed-down version of its guidance covering drip pricing dealing with the parts of the law "which are already clear and largely unchanged" and committed to run a further consultation on other aspects of drip pricing over the summer.
Today the CMA has issued this second consultation, entitled Consultation on Pricing Transparency Guidance.
The consultation covers the pricing information that should be provided upfront to consumers and what to avoid, including so-called "partitioned pricing", which is where the total price of a product is divided into two (or more) separate mandatory components. The guidance sets out proposed core principles to follow when calculating the "total price" and seeks to provide clarity on the treatment of specific charges, including delivery fees, in the presentation of it. It also covers what an invitation to purchase is.
If you are a B2C business, this draft guidance is likely to be relevant to the way you present pricing information to your customers.
The CMA is inviting views on the draft guidance. The consultation closes on 8 September 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
