Prime Minister Andy Burnham has announced plans to address what he characterizes as deceptive discount practices in retail, pledging to eliminate what he calls “phoney bargains.” The government will launch a consultation this autumn to examine whether specific misleading pricing tactics should be added to the list of prohibited practices under the Digital Markets, Competition and Consumers Act 2024.
Current regulations under the 2024 Act already prohibit unfair commercial practices, including deceptive pricing. However, enforcement presents challenges. The Competition and Markets Authority (CMA) can impose penalties of up to 10% of a company’s global turnover and mandate refunds, but the process requires demonstrating that misleading prices actually influenced consumer purchasing decisions. This threshold can be time-consuming and costly to establish, with CMA investigations typically spanning three to six months or longer. The government believes adding specific false discount claims to a list of automatically banned practices would streamline enforcement and make it easier for regulators to take action.
Research by Which?, a consumer organization, found that the vast majority of products advertised during Black Friday sales were cheaper than or identically priced at other times of year, raising questions about genuine savings. Historically, government guidance suggested retailers sell items at a higher reference price for at least 28 consecutive days within the previous six months before advertising discounts. Legal experts note that under current law, retailers retain pricing freedom, with regulations focused on preventing deceptive presentation rather than dictating prices themselves.
The Chartered Trading Standards Institute provides non-binding guidance recommending that reference prices reflect genuine previous sales at the same store, and that products be sold at higher prices for comparable or longer periods than discounted prices. Consumer advocates argue that clearer legal prohibitions on specific misleading practices would help businesses understand compliance obligations and deter deceptive tactics, though drafting such rules carefully to prevent loopholes remains challenging.
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