Parts of the Digital Markets, Competition and Consumers Act (“DMCC Act”) came into force on 6 April 2025, including provisions to protect consumers from unfair trading. These (mostly) replace and update the Consumer Protection from Unfair Trading Regulations 2008.
Whilst many of the same or similar rules will apply to commercial practices as under the previous regulations, there are some important changes introduced by the DMCC Act, including in relation to drip pricing.
What is drip pricing?
Drip pricing is a practice that involves adding unavoidable hidden fees to the advertised price of a product or service. Consumers are shown an initial price for a product and additional fees are introduced (or ‘dripped’) as consumers proceed with a purchase or transaction. Drip pricing can mean consumers are ‘baited’ into looking at a product based on its lower, advertised price and ultimately pay more once further mandatory fees are added.
What does the DMCC Act say about drip pricing?
Under the DMCC Act, the existing offence of omitting material information from an invitation to purchase, which is a prohibited unfair commercial practice, has been broadened.
An invitation to purchase (“ITP”) is essentially any consumer-facing communication which indicates the characteristics of a product and its price (for example, an advert which could appear in various media including email, online, and print, or a search listing result or product detail page on a website or app).
The DMCC Act includes an updated list of material information which must be provided in ITPs. Of relevance to drip pricing, the DMCC Act requires the following information to be included in ITPs (at sections 230(2)(b),(c),(g), (4) and (5)):
- the total price of a product, including any fees, taxes, charges, or other payments that the consumer will necessarily incur if the consumer purchases the product;
- if, owing to the nature of the product, the whole or any part of the total price cannot reasonably be calculated in advance, how the price (or that part of it) will be calculated. In this case, the relevant information must enable the consumer to calculate the total price, and be set out with as much prominence as the total price of the product; and
- any freight, delivery, or postal charges, including any taxes, not included in the total price of the product but which the consumer may choose to incur (or where those additional charges or taxes cannot reasonably be calculated in advance, the fact that they may be payable).
The intention behind these requirements is to increase transparency in pricing and protect consumers from hidden fees.
The required information for ITPs, including pricing information, must be provided clearly, in a timely manner and in a way that the consumer is likely to see it. Failure to include the required information in ITPs would amount to an unfair commercial practice. Note that unlike some other types of unfair commercial practices, there is no need to establish that such omission had, or may have had, an impact on the average consumer’s transactional decision.
The DMCC Act recognises that sometimes it may not be possible to provide all of the required information in an ITP due to limitations resulting from the means of communication used (including space or time limitations). In this case, compliance will be assessed by considering any steps taken by the relevant trader to overcome those limitations by providing information by other means. For example, if there is insufficient space in a search result listing on a website or app to provide all the required information, any missing information could be provided on the linked product detail page instead. There is also no need to provide required information which is already apparent from the context. For example, if an advert is clearly branded with references to a well-known trader (for example, a supermarket or streaming service provider), there is no need to state the trader’s identity in the advert. However, neither of these caveats are likely to assist in relation to the requirement to provide a total price inclusive of mandatory fees, taxes, charges and other payments.
The CMA’s guidance on drip pricing – a phased approach
The Competition and Markets Authority (“CMA”) issued draft guidance on the unfair commercial practices provisions in the DMCC Act in December 2024. This draft guidance was problematic for many businesses in relation to drip-pricing. In particular, many of our retail clients struggled with the CMA’s suggestion that mandatory delivery fees must be included in product prices. For example, if an online grocery business advertises a product for £1 but it is not possible to order the product without meeting a minimum spend (e.g. £20), including the delivery cost (which in practice would likely vary depending on factors such as the total order value, the delivery time and/or slot duration, and whether or not the customer is a member of a loyalty scheme) in the product cost would not make sense for the business or its customers.
Fortunately, in March 2025, the CMA acknowledged the substantive feedback it received from businesses in this area (see here for details) and said that the CMA “want to reflect carefully on that feedback before finalising our position.”
On 4 April 2025, the CMA issued final guidance on unfair commercial practices. This guidance includes a short section on the already well-established ban on drip pricing (explained in the guidance as “genuinely unexpected and untrailed mandatory charges revealed at the end of the purchasing journey”). For aspects of the DMCC Act’s drip pricing rules that have created more uncertainty, the CMA plans to run a further consultation in the summer on revised draft guidance, with a view to producing final guidance in the autumn. In the meantime, the CMA plans to only take enforcement action against drip pricing which clearly breaches the DMCC Act.
It is not clear which specific aspects of the rules will be addressed in the further consultation, as the CMA has only mentioned one example so far (fixed-term periodic contracts). Mandatory delivery fees (as mentioned above) are not expressly mentioned in the drip pricing section of the April 2025 guidance, so hopefully the further consultation will provide helpful draft guidance for businesses in relation to delivery fees.
Don’t fall foul of the prohibition on drip pricing
The new unfair commercial practices rules, including the prohibitions on drip pricing, will apply to commercial practices which happen from 6 April 2025 onwards. In theory, this means that the CMA could exercise its new enforcement powers in relation to drip pricing practices which happen from 6 April 2025. These powers allow the CMA to directly investigate and enforce consumer laws, and impose fines of up to 10% of a non-compliant trader’s annual global turnover. However, in the short term, the CMA has said that it will only take enforcement action against drip pricing that clearly breaches the rules in line with its April 2025 guidance, and generally the CMA has said that it will use its new enforcement powers only in relation to the most egregious consumer law breaches.
To ensure compliance, we recommend that consumer-facing businesses conduct “test journeys” of their customer journeys and audit their ITPs as soon as possible and remedy any drip-pricing issues which are identified. Businesses should also monitor for the CMA’s consultation and further guidance in relation to drip pricing, which may necessitate additional compliance changes.
For further information on this or any consumer law issue, please do not hesitate to contact one of our specialists.
Our previous articles on the consumer law provisions of the DMCC Act can be found here, with further information on the digital markets and competition law aspects here.
