Draft price transparency guidance for consumer-facing businesses: is it clearer how to comply?

On 3 July 2025, the Competition and Markets Authority (CMA) published a consultation on draft guidance which is intended to assist consumer-facing businesses to comply with provisions in the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) that aim to achieve price transparency and prohibit drip pricing. For more about these provisions, see our previous article here.

This consultation may rightly cause some readers to have strong feelings of déjà vu: in December 2024, the CMA published draft guidance in relation to the unfair commercial practices (UCP) provisions of the DMCC Act, which included a detailed section on drip pricing. After robust challenge by various businesses and trade associations, most of that section was removed from the final unfair commercial practices guidance which was published in April 2025. The CMA has now shared its latest proposal on how consumer-facing businesses should ensure pricing transparency and avoid prohibited drip pricing.

In this article we summarise the key points from the draft guidance and give our views on the likely key points of contention for businesses.

What general principles are proposed in the draft guidance?

The draft guidance sets out detailed expectations for the presentation of pricing information in consumer-facing communications, with a particular focus on invitations to purchase (ITP). An ITP is essentially any consumer-facing communication which indicates the characteristics of a product and its price (from  newspaper adverts to product detail pages on a website). Under the DMCC Act, certain information must be provided in ITPs, including the total price of the product, which must include any fees, taxes, charges, or other payments that the consumer will necessarily incur if the consumer purchases the product.

The draft guidance sets out some general principles on how businesses should ensure that product prices in ITPs do not mislead consumers, including:

• Prices must be realistic, meaningful, and attainable for the product being advertised.
• For many products, headline prices must include all mandatory charges. The draft guidance gives various examples of such mandatory charges, including:
  • purchase taxes (such as VAT);
  • administration fees;
  • delivery fees where consumers cannot arrange collection or delivery of the advertised product; and
  • local taxes and resort fees that are payable at hotels.

As per the DMCC Act, a narrow exception to this rule applies where the whole or any part of the total price cannot reasonably be calculated in advance owing to the nature of the product (for example, if a consumer wants to purchase an item which is sold by weight).

• The price must relate to the product being advertised. For example, if an ITP shows a particular version of a product (such as a TV), the price must relate to the particular version shown.
• Indicative and “from” pricing must be used appropriately. For example, a hotel advertising a weekend break should not use a “from” price based on the cost of a mid-week stay.
• Optional charges that most consumers will likely pay should be included in the total price.
• Partitioned pricing – where a price breakdown is shown for a product, with no total price – is not permitted unless, owing to the nature of the product, the total price cannot reasonably be calculated in advance.

What does the draft guidance say about specific types of charges?

The draft guidance also covers the following specific types of charges:

• Mandatory per-transaction charges (such as booking or administration fees that apply to an entire transaction rather than the specific products being purchased) must be included in ITPs, and wherever possible, the total price. For example, if a ticket costs £20 and a £2.50 booking fee applies, early stage advertising should refer to the ticket price as being “from £22.50”. However, if a website allows multiple products to be selected and purchased together, and one or more per-transaction fees apply, it may not always be realistic or meaningful to include all such fees in headline pricing when these charges would only be paid once. In this case, the website could show the item cost with the per-transaction cost stated alongside it, plus a clearly visible running total (with per-transaction charges included) throughout the purchase process. The basket page should include the total price based on the products selected so far, along with a breakdown of any mandatory per-transaction charges, and update dynamically.
• Mandatory delivery charges: the draft guidance relating to per-transaction charges also applies to mandatory delivery charges. The following guidance is also provided:
  • the circumstances in which delivery charges should be considered mandatory rather than optional;
  • the cheapest delivery option should be included in a product’s headline price;
  • if mandatory delivery charges are applied per-product (e.g. on a marketplace where items listed by different traders each have their own delivery charge), the delivery charge should be included in the headline price;
  • where a mandatory delivery charge cannot reasonably be calculated in advance, it must be indicated that delivery charges are payable and how the cost will be calculated. However, this exception should be viewed narrowly and only used when there is a genuine reason why a mandatory delivery charge cannot be set in advance; and
  • if delivery is free or offered at a reduced charge when a certain threshold is met (e.g. “free delivery over £50”), the full delivery fee must be included in the total price until the customer’s basket reaches the relevant threshold.
• Mandatory local taxes and resort fees: these are normally reasonably calculable and therefore should be included in the headline total price. If they are payable locally in a foreign currency, the approximate amount must be calculated using current exchange rates and included in the total price. No later than the final step of the booking process, businesses should include (as applicable) an explanation of how the total price was calculated in this case (e.g. the currency exchange rate used), and a clear and prominent breakdown of ‘pay now’ and ‘pay later’ charges, as well as the total price.

Finally, the draft guidance explains how contracts involving periodic payments (such as subscription contracts) should show the total price, and advises that targeted price reductions should be presented in a way which is not misleading.

Comment

The draft guidance is a step in the right direction for some businesses, especially online retailers and marketplaces who were concerned about the CMA’s previous approach to delivery charges. However, we anticipate that some aspects of the draft guidance will not be popular with businesses (including several aspects of the CMA's suggested approach with regards to delivery charges) and will likely require many businesses to make changes to their current practices, involving considerable time and cost to achieve. In particular, businesses in the travel sector may wish to challenge the approach taken in the draft guidance to local taxes and resort fees. Businesses may also want to challenge the suggestion that optional charges must be included in the headline price where most consumers will likely pay them. The DMCC Act does not expressly require this, it is unclear what constitutes “most” consumers, and the analysis will likely be product-specific for many businesses and therefore not scalable. 

The draft guidance is also sometimes difficult to follow, meaning that it may be difficult for some businesses to determine what changes are necessary (if any) to ensure compliance. This is a problem given that failure to comply with consumer protection law now involves high stakes, with fines of up to 10% of global turnover (see our previous article here about the new enforcement regime under the DMCC Act). Clear and practical guidance for businesses is therefore essential.

As next steps, consumer-facing businesses should review the draft guidance and consider whether to respond directly to the consultation or via a trade association. The consultation closes on 8 September 2025.

If you would like to discuss the draft guidance or another consumer law issue, please do not hesitate to contact one of our specialists.