Drip pricing rules: Tightening the leaks... or just adding more?

The Competition and Markets Authority (CMA) has kicked off a consultation on drip pricing, asking for feedback on its new guidance. While the document has plenty of helpful examples, there are still a few gaps that need to be addressed.

Drip pricing consultation

The Competition and Markets Authority (CMA) has kicked off a consultation on drip pricing, asking for feedback on its new guidance. While the document has plenty of helpful examples, there are still a few gaps that need to be addressed.

What is drip pricing?

"Drip pricing" refers to the practice where a headline price is initially shown to consumers, but mandatory charges are added later during the purchasing process. This can frustrate consumers, making it harder for them to compare prices and often leading to increased cart abandonment.

How is it regulated?

Drip pricing is prohibited under the UK Unfair Commercial Practices provisions (to be enforced from April 2025 under the Digital Markets, Competition and Consumers Act 2024), as it constitutes the omission of material information in an invitation to purchase.

The requirement: 

Traders must now display the total price upfront, which includes all mandatory fees (e.g., booking, joining, service, and delivery fees and taxes). A charge is considered mandatory if it is unavoidable by the consumer. Sounds simple, right….? However, with numerous mandatory fees based on varying consumer choices and information provision, the rules quickly become complex and, at times, confusing.

The specifics:

1. Subscriptions: Even for recurring charges (like a monthly-payment membership), the total price must include the full amount to be paid over the entire contract term (i.e. the sum of all monthly membership payments in the above example).
2. Optional delivery charges: Optional delivery charges can be shown separately from the headline price but must be clearly indicated. While the guidance lacks clarity on display methods, we anticipate pop-up elements like tooltips may be permitted.
3. Click and collect: Charges, like delivery fees, should not be excluded from the headline price just because consumers could technically avoid them—especially if avoiding them isn’t practical due to limited collection points.
   
   

The exemption:

If the mandatory price can’t be determined upfront, traders must explain how it can be calculated (to enable the consumer to calculate the total price) and make this information as prominent as the headline price (e.g. the same text size and not buried at the bottom of the page).

• Space/time limitations: Traders cannot simply use space or time constraints as an excuse for not provide the pricing calculation. The CMA will evaluate whether reasonable efforts were made to provide the information through other means. If it is genuinely not practicable, the details for calculating the total price should be provided close to the headline price, with minimal additional steps (e.g. one click away). 
• Product dependent: Whether a total price can be reasonably calculated depends on the product (accepted examples include charges based on weight, distance, or time). If it's possible but you choose not to, or if your pricing structure complicates it unnecessarily, this won’t be considered reasonable. For example, if a service charge depends on the basket total, the headline price may need to include that charge.
• Dependent on consumer information: If the total price depends on consumer choices or information (e.g., removal or courier services), it may be appropriate to display the price after the consumer provides that information.
• Dependent on consumer choice: The headline price should include all mandatory charges, even if consumers can choose different options. The indicative price should not just reflect the lowest price unless that is realistic and attainable.

The challenges:

Displaying the total price seems simple, but after advising clients across sectors, we know the challenges. Space constraints, pricing dependent on basket totals, and charges tied to customer types (e.g., loyalty scheme delivery options) complicate compliance – issues that remain unaddressed in the CMA guidance. As such, unless these issues are resolved during the consultation, we anticipate compliance will be assessed on a case-by-case basis.

Concerned about next steps? With extensive expertise in consumer law and its integration into online architecture, we can help you interpret the guidance and design a compliant user journey tailored to your needs.