The Competition & Markets Authority (CMA) has written to four food and drink delivery companies to “put businesses on notice” about their pricing practices.
The authority said the letter outlined “concerns about their use of additional fees and online sales tactics”. These concerns include ‘drip pricing’, where an initial price is advertised but mandatory fees are only revealed later in the purchase process, as well as ‘misleading countdown timers’.
Such practices – which the CMA said “pressure customers into buying quickly or lead them to spending more than intended” – are outlawed under the new Digital Markets, Competition & Consumers Act 2024.
The advisory letters follow a review of more than 400 businesses by the authority which “found concerns” across 14 sectors. The four food delivery businesses were among 100 companies receiving the letters, across several sectors. Live events, holiday booking, parking and gym businesses received the majority of the letters, as well as eight retail businesses.
Recipients “must now review their practices and ensure they are in line with the law”, the CMA said, “to avoid the risk of future enforcement action”.
“At a time when household budgets are under constant pressure and we’re all hunting for the best deal possible, it’s crucial people are able to shop online with confidence, knowing the price they see is the price they’ll pay, and any sales are genuine,” said Sarah Cardell, CEO of the CMA.
The authority has also launched a raft of investigations into UK brands using its new powers, which enable it to decide whether consumer laws have been broken rather than having to go through the courts.
StubHub, Viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Wayfair, Appliances Direct and Marks Electrical are all now under investigation.
If the CMA finds there has been an infringement of the law, it can order businesses to pay compensation to affected customers as well as fining companies up to 10% of global turnover.
“This is just the start of our work. Any businesses who break consumer law should be in no doubt we will stamp out illegal conduct and protect the interests of consumers and fair-dealing businesses,” Cardell added.
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