The Competition and Markets Authority (CMA) has published an open letter to online retailers selling goods to UK consumers, warning businesses to ensure their pricing practices comply with the Digital Markets, Competition and Consumers Act 2024 (DMCCA).

The message is clear: "The first price consumers see should be the price they pay". Where a delivery charge must be paid to buy a product, the price displayed to consumers throughout the sales process must include the minimum mandatory delivery charge.

With the Christmas shopping period approaching, the CMA has warned that some businesses are still presenting delivery charges in ways that do not comply with the DMCCA's price transparency requirements.

What do the rules require?

At a basic level, where a business gives consumers the price of a product as part of an "invitation to purchase", the DMCCA requires the total price to be displayed. This means including any mandatory delivery or collection charges, as well as other unavoidable fees, taxes and charges.

Importantly, the total price must be provided at every stage of the customer journey where a price is displayed, including in advertising, on product and listing pages, in shopping baskets and order summaries, and throughout checkout and payment.

The CMA's expectations can broadly be summarised as follows:

Flat delivery charge

where one charge applies to the whole order, regardless of how many items are bought, you must show the total price payable, including any mandatory delivery or collection charge, throughout the shopping process.

You may also provide additional information, such as:

  • a breakdown showing how the total price has been calculated; or
  • the price both including and excluding the delivery charge.

Optional delivery charges

You must make clear throughout the shopping process that optional delivery charges apply.

Where the amount cannot reasonably be calculated in advance, clearly explain that an additional delivery charge is payable and explain how it should be calculated.

This information should be prominent and readily visible. Businesses should not rely on customers accessing links, separate pages, pop-ups, expandable sections or drop-down menus to find it.

Marketplaces, comparison sites and search engines

The requirements also apply to marketplaces, comparison sites and search engines. Where items from different traders each carry their own delivery charge, delivery should be included in the total price of each product.

What is the CMA looking at?

The CMA has identified a number of practices that it is specifically scrutinising, including:

  • displaying a product price without including a mandatory delivery charge;
  • omitting mandatory delivery charges from basket totals or order summaries;
  • failing to provide clear information about optional delivery charges or placing such information behind links or secondary content; and
  • only disclosing delivery charges at a late stage of the checkout process.

What should you do?

With the CMA signalling that it is prepared to take enforcement action, online retailers and other businesses selling to UK consumers should review their pricing practices now. In particular, we recommend:

  1. Audit every customer journey – check all places where prices appear, including advertising, search and product listing pages, product pages, baskets, order summaries, checkout and payment pages.
  2. Check the price displayed at every stage - ensure that each price shown includes any mandatory delivery charge and any other unavoidable fees.
  3. Review how optional delivery charges are communicated - ensure customers are clearly alerted to them throughout the journey and do not rely only on click through links, drop-down menus or other secondary content to discover them.
  4. Read the CMA's price transparency guidance - the open letter specifically refers to this and the CMA will expect retailers to be aware of this guidance.

We have been advising clients on the compliance of their customer journeys, pricing practices and product listings with the DMCCA. If you would like to discuss what the CMA's approach means for your business, please speak to Dan Smith or Zoe Pearman.