DBT consultation on improving price transparency and product information for consumers - Which? response

Which? strongly welcomes this consultation aimed at improving information and price transparency in key areas where our research has found significant consumer harm and gaps in consumer protection. It is crucial that the Government urgently tackles the areas identified in order to prevent consumers from being confused or misled into making choices that they would not otherwise have made and ensures they are able to make the optimum choices for their needs. This is even more crucial as people struggle with cost of living pressures. 

Display of pricing information 

Which? investigations have found that it can be difficult for consumers to assess best value between products because unit pricing is not always displayed clearly and consistently and can be missing from promotions, including loyalty card pricing in some stores. We support the areas that the Department for Business and Trade (DBT) is now suggesting as areas for Price Marking Order (PMO) reform, including simplifying the unit pricing method so that there is much greater consistency of units used; providing more clarity on how unit pricing information should be displayed so that it is clearly legible; and explicitly requiring the display of the promotional unit price including for loyalty prices. We also strongly support changing the small shop exemption so that this no longer excludes national chains of convenience stores from having to display the unit price. We do, however, think that the Government needs to go further than its proposal on the unit pricing method. As recommended by the CMA, it should specify one unit measurement to be used per product type across all retailers and across all sales channels. This is essential to avoid different brands or retailers using different units which would mean it would remain difficult for consumers to make comparisons. We would urge the Government to update the Order as swiftly as possible - and improvements made in a timely way to support people as they struggle with the cost of living. 

Hidden fees and drip pricing 

As the consultation makes clear, the practice of drip pricing can undermine price transparency and make it difficult for consumers to make informed purchases. It can come in several guises and prices that are dripped may be mandatory fixed fees, such as booking fees when buying a ticket for an event, mandatory variable fees such as a service charge that is added or (ostensibly) optional fees, such as options for extra luggage or more leg room when booking a flight. Our latest research has highlighted how the practice of drip pricing can be very frustrating for consumers and lead to financial harm but also a lot of wasted time. 

There is a clear case for banning the practice of dripping mandatory fees and this should be addressed through the Digital Markets, Competition and Consumers (DMCC) Bill by making drip pricing a banned practice in Schedule 18. This should require that specific fixed fees, but also the addition of variable fees and the basis on which they are calculated, should be set out at the start of the buying process. The addition of hidden ‘necessary’ fees that are not mandatory but are unavoidable for a significant proportion of consumers, such as requiring consumers to pay to select seats on a plane so that they can sit next to their children, should also be included as a banned practice and the need to explain these up front clarified through guidance. While genuinely optional dripped fees may relate to additional services which may be beneficial for consumers, they still need to be highlighted much more clearly upfront. They should be opt-in by default (requiring a consumer to make an active choice of selecting the extra item or service) and their sequential presentation should be undertaken in a timely manner so that consumers can easily understand and decide what they do and don’t need to pay for. 

Fake reviews

Which?’s investigations and research have shown that fake reviews are prevalent across online platforms and that these generate real harm by influencing consumer decisions. We support the Government’s proposals to introduce new automatically unfair practices on the buying and selling of fake reviews as well as hosting reviews without taking proportionate steps to ensure that they are genuine. The practice concerning hosting reviews must include ensuring that reviews are not generated or presented in a way that leads to consumers being misled and this includes ensuring incentivised reviews are clearly labelled. As part of taking proportionate steps to ensure that reviews are genuine, platforms should focus on reducing the harm faced by consumers online, in particular the way that fake reviews negatively influence their purchasing decisions. They should do this by assessing risk and then appropriately tailoring their mechanisms for preventing and detecting fake and misleading reviews to the design of their platform.  We believe that for these new practices to act as an effective deterrent they must include criminal liability, and therefore specifically be set out as banned practices in Schedule 18 of the DMCC Bill. 

Online platforms’ responsibilities to consumers 

Consumers increasingly shop on online platforms but lack the protections that they have through more traditional retailers. Which? welcomes the consideration of how the professional diligence requirements within the Consumer Protection from Unfair Trading Regulations (CPRs) could be used more effectively and potentially by a wider range of regulators. We have repeatedly found a range of consumer harms due to a lack of platform responsibility, besides fake reviews highlighted above, including misleading advertising and the sale of unsafe consumer goods, food and illegal weapons. Making it easier to apply the professional diligence requirement would be helpful - however we also think that there is a need for more specific duties on platforms to be incorporated within specific legislation, such as is proposed in the DBT’s product safety review. We do think that, in line with the transparency principles set out in this consultation, legislation should be updated (e.g. through the DMCC Bill) to require online platforms to trace their traders and make it clear to consumers who they are buying from. This should prevent confusion when people are buying from a third party seller or from another consumer rather than a trader. Consumers should also have rights to proper procedures to make complaints to online platforms, in line with those in the new Online Safety Act. 

Private right of redress: prohibited practices

We agree that a wider range of unfair practices, i.e. misleading omissions, breaches of the requirements of professional diligence, invitations to purchase that omit material information, and practices listed in Schedule 18, should be included as prohibited practices which attract private rights of redress. The starting-point should be that whenever a trader has breached a provision in the CPRs any consumer who has suffered loss as a result should be able to recover that loss. 

Online interface orders

The power to make applications to the court for online interface and interim online interface orders under Part 3 of the DMCC Bill should be extended to additional enforcers, both public and private. They have the potential to be a very effective tool, subject to the oversight and decisions of a court, to ensure that illegal and harmful content can be swiftly removed to minimise any negative impact on consumers. It would be a particularly useful tool for Trading Standards, as well as regulators such as the Office for Product Safety and Standards (OPSS) and Food Standards Agency (FSA) for example. For the powers to truly be effective, there would need to be some amendments made to the current wording of the DMCC Bill. Section 154(b) states that a court may make an order if there are no other means available to address the infringement. This effectively makes the power currently unusable as this is a high legal hurdle to overcome. This section  therefore needs to be removed if the power is going to have any meaningful impact on regulation. We consider that the pre-action protocol for the court process currently in place adequately fulfils the need for consultation.