The government is seeking views on certain aspects of consumer law, such as in relation to pricing and fake reviews, to ensure the UK has the right consumer laws in place post Brexit, including ensuring that the Digital Markets, Competition and Consumer Bill (DMCC), currently passing through Parliament, adequately addresses these specific issues.

Price display

The Price Marking Order 2004 (“PMO”) requires traders to display the selling price and, where appropriate, the unit price of products (the price for a metric unit of the product, e.g. kilogram or litre) for products sold from bulk. Concerns have been raised as to how these requirements apply to promotions, such as volume pricing (e.g. multibuy discounts) or loyalty pricing (e.g. lower prices for customers who are members of the trader’s reward scheme). The UK government is also proposing to introduce a deposit return scheme (“DRS”) under which customers will pay a deposit when purchasing single-use drinks containers which is then returned when the container is recycled. The consultation seeks views on reforming the PMO to mandate consistent use of unit pricing, improving the legibility and prominence of pricing information, strengthening and clarifying the requirement to provide selling and unit pricing for promotions and how the DRS deposit should be displayed on pricing labels.

Drip pricing

Government-commissioned research, published at the same time as the consultation, reveals that drip pricing is a common strategy used by online traders in the transport, communication, hospitality and entertainment sectors, and that such practices are associated with a range of consumer detriments. Drip pricing occurs when consumers are shown an initial price for a product or service (“base price”) and additional fees (e.g. delivery or booking fees) are shown only later during the checkout process. Consumers often choose to complete the purchase despite the increased cost and the practice can limit price competition by making it hard for consumers to compare prices across providers. In particular, the research concluded that service fees (e.g. booking or processing fees) tended to meet the most criteria of harm (e.g. by type and number, position in check out process and their size relative to the base price). Not all drip pricing is harmful, but the research nevertheless estimates that dripped fees (excluding delivery costs) could cost the UK consumer an additional £595m to £3.5b online each year (even when taking account of consumer expectations and the degree of harm of the different types of dripped price charges).

Drip pricing could amount to an unfair commercial practice under the Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”), which are largely being restated in the DMCC, where it hides or omits material information or provides it in an unclear or untimely manner. The consultation is seeking views on whether the existing law is adequate. In particular, views are sought on whether to create new requirements for drip pricing consisting of mandatory fixed fees (fees which all consumers must pay e.g. mandatory car hire insurance), mandatory variable fees (fees which cannot be calculated in advance e.g. mileage fees for car rental) and optional dripped fees (e.g. airline seat selection).

Fake reviews

Other Government-commissioned research has shown the prevalence of fake reviews in online shopping. The consultation seeks views on whether to add to the list of unfair commercial practices under the DMCC the practice of submitting, commissioning or incentivising fake reviews or offering to do so, misrepresenting reviews (e.g. deleting all negative reviews) or failing to take reasonable and proportionate steps to remove or prevent consumers encountering fake reviews. It also seeks views on how to define “fake” in this context and whether this new unfair commercial practice should give rise to criminal liability.

For more information, click here. To access the consultation document, click here and, to respond to the consultation, which closes on 15 October 2023, click here. To access the drip pricing research, click here.