Food and drink delivery companies on target list for CMA

The Competition and Markets Authority (CMA) has launched its’ first investigation using its new powers under the Digital Markets, Competition & Consumer Act (DMCC), into online pricing practices. Based on the results of its compliance sweeps, the CMA will be sending advisory letters to 100 businesses, outlining concerns about their use of additional fees and online sales tactics. The letters target sectors where the CMA identified potential concerns, as well as key areas of spending, and food and drink delivery companies have been specifically listed, as well as cinemas, live event tickets and online vouchers. 

The new powers will enable the CMA to decide whether consumer laws have been broken, rather than having to go through the courts. 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.

The investigation initially lists 8 businesses the CMA states it has reason to suspect have infringed consumer law in relation to their use of fees, use of misleading time-limited offers and/or the practice of automatically opting consumers in for optional charges. The named businesses and reasons are as follows:

• StubHub and viagogo – secondary ticketing sites regarding the mandatory additional charges applied when consumers buy tickets – and whether or not these fees are included upfront.  
• AA Driving School and BSM Driving School over whether mandatory fees are included in the total price the consumer sees at the beginning of the purchase process.  
• Gold’s Gym in relation to when a one-off joining fee for annual membership is presented and not including it in advertised membership costs.
• Wayfair – in relation to time-limited sales
• Marks Electrical – in relation to default opt-ins
• Appliances Direct – in relation to time-limited sales and default opt-ins  

At this stage, the CMA has reached no conclusions about whether the law has been broken in any of these investigations.

This is a good reminder for all companies with online pricing to review how these are presented against consumer protection regulations.