CMA ‘starts to enforce’ rules in pricing crackdown

The Competition and Markets Authority (CMA) has confirmed it is “doing enforcement work” on travel industry compliance with guidance on transparent pricing issued last November.

Consumer law director Jason Freeman noted the CMA had sent “about 100 advisory letters” to businesses, including travel companies, in November and said: “We expected people to be fully compliant by February and February has passed. So, if you’re not compliant, I would reflect on that if I were you.”

Speaking at the Abta Travel Law Seminar in London on Tuesday, Freeman warned: “If you received a letter and you’re not compliant, that would be an aggravating factor and increase any penalty.”

He highlighted the CMA’s new enforcement powers under the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) and said: “We’re doing enforcement work in this area. We’ve launched direct enforcement action.”

Freeman added: “That doesn’t mean we’re going to take enforcement action against everyone.”

He cited the CMA’s recent enforcement action against the AA, which was fined £4.2 million for not including a mandatory £3 booking fee in a total price for driving lessons, and said: “A number of other cases are progressing.”

Freeman argued the DMCC Act and the CMA guidance were devised “to be immune from any loopholes” and said: “They’re triggered when you give any pricing information. Have you given the total price including any charges the consumer will incur?”

He pointed out mandatory local charges “can be expensive” and said: “We’ll be looking at enforcement on resort fees as they can be significant. But even if they’re small, they have to be included in the price.”

He added: “Rates change, but you still have to give the total price.”

Travel lawyer Rhys Griffiths, partner at Fox Williams, said “the fundamental effect” of the CMA’s new powers “has been to change who holds the cards between a business and the CMA”.

He added: “Under the old regime, a CMA letter would come in, there would be a bit of back and forth and you would come to an agreement. In this new world, the CMA is in the driving seat.”

Griffiths noted 19 travel firms were among the 100 businesses to receive CMA letters last November and said: “That tells you something.”