Over the course of 2022 to 2024, the Competition and Markets Authority (CMA) investigated a number of practices by the Emma Group (Emma) and its compliance with consumer protection laws, notably Emma’s use of urgency claims and reference pricing. Whilst the parties subsequently reached settlement over the former issue (confirmed by a High Court order on 22 May 2026), the latter issue relating to reference pricing remains in dispute and was heard in the High Court last week. We anticipate a "judgement" being handed down in the coming months, which could have significant implications for how businesses can advertise discount pricing.
The CMA’s case
Part of the CMA investigation considered whether Emma had misled consumers by using a range of “urgency” messaging on their website, such as:
- The use of prominent, non-product specific discount banners, for example, with a discount percentage and a claim that this was about to expire, potentially inducing an impression of scarcity with the consumers when in fact these banners were either regularly reset or always present.
- Displaying messaging stating that a particular product was in high demand, often supported by displaying how many times a product had been viewed very recently when in fact this was not the case and/or there was no risk of Emma running out of stock. The CMA considered that such messaging implied that a significant number of consumers were purchasing, or in the process of purchasing, the product, thereby creating a false impression of scarcity and exerting pressure on consumers to make a purchase.
Another practice that the CMA considered unlawful was the displaying of “discounted” prices alongside struck-out, higher reference prices. This was despite a limited number of products, or none in some instances, having been sold at those reference prices before being reduced. It should be noted that in its “Discount and reference pricing principle: selling mattresses online” guidance, the CMA has specifically stated that at least one product must be sold at a “was” price for every 2 sold at a discounted price. However, due to when this guidance was published (in August 2024) the CMA could not rely on it in this case.
The CMA contended that these practices contained false information or were likely to mislead the consumer, amounting to unfair commercial practices and/or misleading actions under Regulations 3 and 5 respectively of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
Emma's defence
In connection with the “urgency” messaging referred to above, Emma accepted that it had breached the CPRs, though emphasised that these practices were no longer ongoing and that it had willingly cooperated with the CMA in its investigation. This has now been formalised through court endorsed undertakings requiring Emma to cease misleading “limited time” claims, high demand indicators and similar practices where these do not reflect genuine consumer conditions, as well as to implement ongoing compliance, monitoring and reporting measures.
However, Emma continued to dispute that the use of strike through pricing was necessarily misleading, even when only a few products were sold at the reference price, on the basis that:
- The CPRs contains no express reference to pricing by reference to sale volume.
- The CMA’s reliance on a fixed ratio (a 2:1 discounted-to-reference price ratio as per the CMA guidance) for the volume of sales has no statutory basis and is unworkable in practice.
- Such approach would effectively amount to the CMA creating new rules by enforcement.
Emma also argued that the enforcement order sought by the CMA was disproportionate and inappropriate, even if breaches are established. The proposed ratio cap and compliance regime are not found in the legislation, and no proper consultation or competition assessment was undertaken by the CMA. Moreover, the order would distort competition and should not be used to impose novel, prescriptive regulatory standards in circumstances where factual and legal issues remain contested.
The implications
Against this backdrop, the case has implications well beyond Emma itself. This enforcement action reinforces that online pricing and promotional practices remain a clear priority for the CMA in its increasingly robust approach to consumer protection. Although the investigation was launched before the CMA acquired its enhanced powers under the Digital Markets, Competition and Consumers Act 2024 (and therefore it is being enforced under the “old” regime), the relevant provisions in issue are largely replicated under the DMCCA.
Recent investigations across sectors including ticketing, driving schools, gyms and major online retailers demonstrate a sustained and widening focus on pricing conduct, particularly in digital environments. The conclusion of the AA Driving School investigation with a £4.2 million fine is especially notable. It sends a strong signal that the CMA is willing to use its new fining powers where it identifies misleading pricing practices, materially increasing the financial and reputational risk for businesses. Pricing compliance can no longer be treated as a secondary marketing issue but must be approached as a core legal and governance concern.
The dispute before the High Court has now narrowed to a fundamental issue: how reference pricing can be used without misleading consumers, and what evidence is required to substantiate the claimed saving. In particular, the case raises questions about whether regulators can require proof of sales volumes at the reference price, or whether a more flexible, contextual assessment is required under consumer protection legislation. These issues go to the heart of how both the CMA (and the Advertising Standards Authority) have historically policed discount promotions. If Emma is successful, it could constrain the extent to which regulators can rely on rigid or quasi prescriptive standards derived from guidance rather than statute. Conversely, an outcome favouring the CMA may entrench more restrictive expectations around reference pricing.
The case also highlights the need for businesses to review their promotional strategies, properly substantiate discounts, and prepare for increased scrutiny in a more interventionist enforcement environment. While the reference pricing point is yet to be ruled over, the CMA’s action has already resulted in Emma committing to implement monitoring measures and on going reporting to the CMA. Which comes after a years long investigation.
All of which serves to illustrate the importance compliance in promotions as regulatory investigation and enforcement is costly, and disruptive. Businesses should consider these points in mind when seeking to use practices which suggest that offers are time limited or which otherwise create a “pressure selling” environment for consumers.
The Mills & Reeve advertising team will continue to monitor these developments closely.
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