The Competition and Markets Authority (CMA) is reinforcing its commitment to enforce new retail pricing rules for businesses. The agency emphasizes that it will take action to ensure compliance with these regulations, which aim to improve transparency in holiday pricing.
CMA’s New Pricing Rules
Under the new guidelines, travel companies must incorporate local taxes into the total price displayed before customers make a booking. This includes all mandatory fees associated with a holiday, and these costs must be clearly advertised in promotions.
Potential Consequences for Non-Compliance
- ABTA has expressed concerns over serious implications for companies that fail to comply.
- Failure to include unavoidable fees could lead to penalties.
The CMA’s guidance, issued in November, allowed a three-month period for businesses to adjust their practices. However, many companies are still not in compliance, prompting fears of future enforcement actions. Alan Bowen, legal advisor at the Association of Atol Companies, noted significant gaps in compliance across the sector.
Enforcement Actions and Penalties
Emma Cochrane, acting executive director of the CMA, stated that this enforcement is a new capability under the Digital Markets, Competition and Consumers Act. The CMA has already executed its first fine under these powers, imposing a £473,000 penalty on Euro Car Parks for non-compliance with information requests.
Previous Compliance Efforts
Last April, the CMA had also issued guidance on compliance concerning fake reviews, allowing a similar three-month adjustment period. Following this period, the agency conducted compliance checks on over 100 businesses, discovering that more than half needed to improve their practices.
Industry Collaboration on Clear Pricing
To support businesses in adhering to these new rules, the CMA has launched an online campaign in partnership with TV presenter Alexander Armstrong. This initiative, known as the Clear Pricing campaign, introduces a ‘3 Step Pricing Check’ that businesses can utilize to ensure lawful pricing practices.
Three-Step Pricing Check
- Show the total price upfront.
- Include all mandatory charges in the advertised price.
- If unable to provide a total, clarify how customers can calculate the costs.
The CMA has reiterated that hiding additional mandatory fees, commonly referred to as “drip pricing,” is illegal. Cochrane emphasized the importance of transparency, stating, “We want businesses to stay on the right side of the law and compete fairly based on their products rather than hidden fees.”
The shift toward clearer pricing marks a significant change in consumer protection regulations and represents the CMA’s ongoing efforts to safeguard consumer rights in the retail market.
