The announcements come as the Competition and Markets Authority (CMA) recalibrates its approach to “was/now” pricing after Emma Sleep, while the UK government consults on adding fake “was” prices, invented discounts and misleading recommended retail prices (RRPs) to the Digital Markets, Competition and Consumers Act (DMCCA)’s banned practices list. Together with the CMA’s Microsoft and Euro Car Parks probes, these developments show UK consumer enforcement moving from legislative design to practical scrutiny.
1. A new approach to reference pricing cases on the horizon?
In a case pursued under the old court-based consumer enforcement regime, on July 30, 2026, the High Court rejected the CMA’s proposed 1:2 fixed volume requirement (FVR) in its case against mattress firm Emma Sleep’s use of “was/now” pricing. The CMA’s FVR approach would require Emma Sleep to sell, or have sold, one product at the higher reference price for every two products offered at the lower promotional price.
In rejecting this, the court noted that a business’s failure to satisfy a fixed ratio would not necessarily mean that consumer law was breached. Further, it considered that it would be disproportionate to require Emma Sleep to run the risk of a potentially significant decline in its business fortunes given the concerns identified with the proposed 1:2 FVR.
While the CMA rethinks its approach to “was/now” pricing, having now withdrawn its online mattress selling guidance, the judgment does not give retailers carte blanche. Emma Sleep had already admitted breaches concerning misleading countdown timers, false “high demand” messages and “discount” claims that created false pressure on consumers to make purchases. And the referencing pricing aspect remains open—the court invited the CMA and Emma Sleep to work together to agree the terms of a final order.
Reference pricing is a priority for the UK government too. This autumn it will consult on whether fake “was” prices, invented discounts, and misleading RRPs should be added to the list of practices automatically banned under the DMCCA. Doing so, the government considers, will make it easier to take enforcement action while also simplifying rules for businesses to follow. The proposal comes as part of a package of “everyday fixes” to help consumers with the cost of living.
The CMA currently must establish the misleading effect through detailed factual evidence. Subject to the consultation’s outcome, adding these practices to the banned list would introduce a bright-line prohibition. “Was” prices can be legitimate where the reference price is genuine and realistic, as the Emma Sleep judgment recognises—the consultation will be critical in determining whether practices that can be genuine are appropriately placed within the banned practices list.
Takeaway
Businesses that rely on promotional pricing strategies should monitor the consultation closely, alongside ensuring that pricing strategies do not give consumers a false sense of value.
2. Subscription contracts back in the spotlight
The government has also announced that new subscription rules under the DMCCA will come into force in January 2027. This accelerates the timing from the government’s consultation response, which had anticipated commencement in spring 2027.
The government says the rules are aimed at ending “subscription traps,” where consumers find it hard to cancel subscriptions or are automatically renewed at higher cost. Hotly anticipated CMA guidance on the subscriptions regime is expected in due course. Meanwhile, the CMA has placed subscription contract cases firmly on its agenda.
Last month, the authority formally launched an investigation into Microsoft’s marketing of subscription plans. From January 2025, existing customers of the Microsoft 365 Personal and Family plans were given access to new features at no extra cost for the remainder of their subscription period. At renewal, they were rolled onto a plan with those features at a higher price unless they selected another plan or cancelled. For annual Personal and Family customers, the CMA says that the enhanced plan was GBP25 more per year than a “Classic” version, which preserved the previous features at the previous price.
The CMA is examining whether pre-renewal communications gave customers the key information they needed about the plans, price difference and available options before making a decision.
It is assessing Microsoft’s conduct under the current law on unfair commercial practices. However, the case does read like an early test of the same issues that the subscriptions regime is designed to address: clear pre-contract information, transparent renewal notices, and easy cancellation.
Parallel action is already underway elsewhere, with the Australian Competition and Consumer Commission bringing Federal Court proceedings and the Italian Competition Authority investigating the renewal communications. The CMA is at an early stage of its investigation and has reached no conclusions about whether Microsoft has broken the law.
Takeaway
Since the DMCCA’s enactment, businesses have been encouraged to evaluate their customer journeys, contract terms and cancellation flows. Businesses that are yet to start the process of coming into compliance may want to accelerate their preparation as subscription renewal communications are likely to become an enforcement focus.
3. Procedural powers as a gateway to substantive scrutiny
In February, the CMA fined Euro Car Parks (ECP) GBP473,000 for failing to respond to an information notice. This fine marked the first use of the CMA’s enhanced procedural enforcement powers under the DMCCA.
Now, the CMA has opened a formal probe into ECP, investigating whether: (i) it is fair for drivers to receive parking charges while queuing for, or using, petrol pumps and other forecourt services, and (ii) ECP’s wider appeals process is compliant with consumer law.
ECP is appealing the CMA’s procedural fine, but the fact pattern suggests that the earlier information-gathering exercise may have fed into the CMA’s decision to open the substantive investigation. The CMA is at an early stage of its investigation and has reached no conclusions about whether ECP has broken the law.
Alongside the formal investigation, the CMA announced a package of actions to improve the experience of UK motorists dealing with private parking operators. These include making recommendations to government on a new Code of Practice and writing to other operators outlining the CMA’s concerns about potentially unfair practices in the sector.
It is clear that the CMA is willing and ready to use its enforcement toolkit to investigate practices that affect customers across the UK, in everyday transactions.
Takeaway
The ECP investigation is a reminder that businesses should look beyond headline pricing and terms, and test whether the practical operation of their customer journeys, complaints handling and appeals processes could withstand scrutiny under consumer protection law.
Practical steps for businesses
Businesses should use this period to audit reference pricing, renewal communications, cancellation flows and CMA response protocols before the next wave of consumer enforcement lands. We will keep you updated as developments unfold.
