When the Digital Markets, Competition and Consumers Bill (DMCC) was introduced to parliament last year, there was some surprise that it did not cover drip pricing and fake reviews.
Drip pricing occurs when consumers are shown an initial price for a good or service while additional fees are revealed (or “dripped”) later in the checkout process. The changes will mean that fees that are mandatory must be included in the headline price or at the start of the shopping process – these include booking fees for cinemas and train tickets. Optional fees such as airline seat and luggage upgrades for flights will not be included in these measures.
Research cited by the government suggests that drip pricing is widespread and occurs in more than half of providers in the entertainment (54%) and hospitality (56%) industries, and almost three quarters across transport and communication (72%) sectors. Every year, these unavoidable (and initially undisclosed) fees cost UK consumers £2.2 billion.
Fake reviews are seen as another significant problem, particularly for online shoppers. The government seemed unsure from the outset about omitting them from the DMCC Bill, and after a period of consultation, announced today that they would add fake reviews to the list of ‘blacklisted’ practices in the DMCC, i.e. practices which are automatically considered unfair and unlawful.
In particular, it is likely to be a banned practice to:
- commission or incentivise any person to write and/or submit a fake consumer review of goods or services,
- host consumer reviews without taking reasonable and proportionate steps to check they are genuine,
- offer or advertise to submit, commission or facilitate fake reviews.
So, those who host reviews on their website will need to take this seriously, but others will too.
The government will be tabling amendments to the DMCC Bill to deal with those two issues.
In related news, the CMA also carried out an investigation of the groceries market, which revealed that there were problems with the clarity and transparency of price labels in supermarkets. The main criticism is that it is still far too difficult for consumers to compare the price of like-for-like products on supermarket shelves, with some retailers/manufacturers appearing to deliberately bamboozle customers. The trend for providing loyalty card holders with huge (and possibly artificial) discounts has only added to this confusion.
Therefore, the CMA has been considering changes to the current rules, found in the Price Marking Order (PMO). The PMO requires traders to display the final selling price and, where appropriate the final unit price (e.g., price per litre/kilogram) of products in a clear way - but it has been inconsistently applied.
The upshot is that the PMO will be updated with the aim of ensuring unit pricing is consistently applied, including to promotions and special offers. New guidance will also be provided this spring. The PMO will also reflect the proposed Deposit Return Schemes so the cost of the deposit is displayed separately on price labels.
It will be interesting to see the final shape of the provisions. We will report further when the full consultation response and the wording for the DMCC Bill are available.
The CMA is also investigating those loyalty card discounts, and we await further news on that investigation, too.
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