Outrageous fake reviews and sneaky hidden fees are now banned once and for all in a major win for consumers right across the UK
Fake reviews and hidden fees that cost consumers £2.2bn every year now banned
CMA takes on major new powers to directly enforce new consumer laws
Changes will protect consumers and create a more level playing field for businesses, helping to deliver economic stability as part of the Plan for Change
Outrageous fake reviews and sneaky hidden fees are now banned once and for all in a major win for consumers right across the UK. These laws will help deliver economic stability as part of the Plan for Change.
The new measures coming into force today will give the public control over their cash and save them money in the long run.
All mandatory fees, such as admin fees or ticket booking fees, must now be included in the headline price and can’t be deceptively dripped in throughout the checkout process, to dupe customers into paying more than they originally bargained for.
The ban aims to bring to an end the shock that online shoppers get when they reach the end of their shopping experience only to find a raft of extra fees lumped on top.
So, for shoppers buying train tickets – they won’t be stung by a hidden booking fee at the end of the checkout.
When buying a takeaway, the delivery and admin fees must be clear at the start of the process.
The same will apply to all online shopping experiences from concert tickets to trips to the cinema.
Every year a whopping £2.2 billion is spent by consumers on unavoidable hidden fees, which is why these new rules are coming into force.
Not only will it create greater transparency, but it will make it far easier for consumers to confidently compare products and services to make sure they are getting the best bang for their buck.
Justin Madders, Minister for Employment Rights, Competition and Markets, said: “From today consumers can confidently make purchases knowing they are protected against fake reviews and dripped pricing.
“These changes will give consumers more power and control over their hard-earned cash, as well as help to establish a level playing field by deterring bad actors that undercut compliant businesses, helping to deliver economic stability as part of our Plan for Change.”
Outlandish fake reviews will also be banned today – so customers know what they are buying when they shop online.
The legislation will prevent punters turning up to a restaurant with 5-star reviews only to be served 1-star quality food. Or ordering a product online from a top-rated seller only to find it never turns up, or that when it does, it doesn’t look anything like it did in the picture, despite what previous buyers said.
Reviews were found to be used by 90% of consumers and contributed to the £217 billion spent in online retail markets in 2023, underscoring the importance of these new consumer protection laws.
New laws will also help prevent well-intentioned and compliant businesses from being under-cut by those seeking to catch out consumers with stealthy additional prices and fake reviews.
Sarah Cardell, Chief Executive of the CMA, said: “We will use these new provisions to safeguard people from harmful and unfair treatment, and to foster the level-playing field for the vast majority of businesses who want to do the right thing for their customers.
“We will be tackling the more egregious practices first and working hard to support businesses with compliance, conscious that – especially for small businesses – the burden of following the rules must be proportionate.”
This new consumer protection regime will be implemented by the Competition and Markets Authority (CMA) in a way that is as simple as possible for smaller businesses to comply with.
This government is committed to taking action to reduce unnecessary burdens on business, meaning that should any new rules be required, these will be as clear as possible and only used where necessary and proportionate.
The Competition & Markets Authority has set out comprehensive proposals to deliver better outcomes for parents in the infant formula market – both in terms of the choices they make and the prices they pay
We’re recommending standardised infant formula packaging in hospitals; providing clear information to parents and banning the advertising of follow-on formula.
CMA infant formula study finds that a combination of factors is leading to poor outcomes for parents, who could be saving around £300 a year by switching to a lower priced brand
Issues include the design and operation of current regulations and the responses of consumers to advertising which emphasises branding when, in fact, all infant formula will meet babies’ full nutritional needs
CMA heard concerns that parents on lower incomes are disproportionately affected due to higher rates of formula feeding
CMA final recommendations cover standardised packaging in hospitals; providing clear information to parents in healthcare and retail settings on the nutritional sufficiency of all infant formula; making it easier to compare prices of different brands; extending the ban on advertising to include follow-on formula; and allowing parents to use vouchers and loyalty points to buy infant formula
Given the steer from governments that regulatory restrictions on price promotions of infant formula support breastfeeding, the CMA is not recommending removing this ban at this stage, but stands ready to support further consideration of this option if asked
Following a market study into the infant formula and follow-on formula market, the Competition and Markets Authority (CMA) has issued its final recommendations.
Sarah Cardell, Chief Executive of the CMA, said: “Every parent wants to give their baby the best possible start in life. Many whom need, or choose, to formula feed, pick a brand at a vulnerable moment, based on incomplete information, often believing that higher prices must mean better quality. This is despite NHS advice stating that all brands will meet your baby’s nutritional needs, regardless of brand or price.
“Governments across the UK are committed to the tight regulation of infant formula for public health reasons. So, our proposals are designed to help parents make the best choices for them and their babies, with access to better information, while sharpening the effectiveness of the existing rules.
“Our proposals will also make it easier for regulations to be properly enforced, while ensuring manufacturers and retailers can be more confident in what they can and can’t do according to law.
“We strongly encourage governments to act on the recommendations to stop well-intended regulation driving poor outcomes for consumers. We’re ready to help implement the changes and support thinking around further measures, including removing the ban on price promotions, should governments consider it necessary at a later stage.”
CMA findings
Advertising and labelling of infant formula is strictly regulated. For example, advertisement and promotion, including price reductions or deals, is restricted so as not to discourage breastfeeding.
Many parents choose a brand for the first time in vulnerable circumstances – often in hospital immediately after birth – and frequently without the clear, accurate and impartial information needed to make informed decisions. People often feel under pressure, naturally wanting to do what is best for their baby. Many actively choose a more expensive product, assuming this means better quality.
However, NHS advice makes clear: “It does not matter which brand you choose, they’ll all meet your baby’s nutritional needs, regardless of price”.
Against this backdrop, rather than competing strongly on price, manufacturers place significant emphasis on building brand awareness to secure customers. For example, some regularly supply the NHS with below cost formula to reach new parents – and once parents have found a brand that works for their baby, they rarely switch.
Regulation states that the labelling and presentation of infant and follow-on formulas should be ‘clearly distinct’. Despite this, manufacturers use similar branding and labelling – including similar colour palettes, fonts and imagery – across infant and follow-on formulas. When combined with large marketing budgets, this approach indirectly supports the sale of infant formula, with CMA evidence indicating that parents are disproportionately influenced by such branding practices (be it in hospitals, online or in store).
The CMA heard concerns that parents on lower incomes are more likely to formula feed so are disproportionately impacted by infant formula pricing. While some government support is available to those eligible, most infant formulas exceed the weekly value of benefits available through schemes such as the Healthy Start and Best Start Food. This can lead to parents foregoing food in order to provide for their babies.
On pricing, differences between brands can have a sizeable impact on parents’ finances. Evidence reviewed by the CMA shows that they could make a saving of around £300 over a baby’s first year of life by switching from a popular mid-priced product to a low-priced brand.
Recommendations
The 4 recommendations from the CMA are:
Removing brand influence in healthcare settings: Parents should be provided with timely, clear, accurate and impartial information on nutritional sufficiency of all infant formula products as early as possible. Where parents are given infant formula in healthcare settings, labelling should be standardised to reduce the influence of branding on their decision making. For example, branded formula could be put into non-branded containers, or the NHS could have a white-label formula.
Equipping parents with the right information when they are shopping: Information about nutritional sufficiency should be displayed clearly and prominently on shelves and when buying online. In store, all brands of infant formula should be displayed together and in a separate cluster from other formula milks to enable quick and easy price comparisons.
Strengthening labelling and advertising rules: All packaging should clearly display information on nutritional sufficiency. Claims that are intangible, or cannot be easily checked by parents, should be banned. Like infant formula, advertising (including price promotions and deals) for follow-on milks should be banned. To help shops, manufacturers and enforcers, government should clarify what constitutes ‘advertising’, outlining exactly what shops and manufacturers can and cannot do regarding formula milks. Parents should be allowed to use gift cards, vouchers, loyalty points, and coupons to purchase infant formula.
Effectively enforce current and future rules: Strengthen the roles played by relevant authorities so they must approve the packaging of all infant formula products before sale. At present, companies can put products onto the market before the relevant authority has reviewed the label.
Public Health Minister, Ashley Dalton, said: “I welcome this report and would like to thank the Competition and Markets Authority for their thorough investigation.
“There are many benefits of breastfeeding but for those families that cannot or choose not to breastfeed, it is vital that they can access formula that is affordable and high quality. Families should not be paying over the odds to feed their babies because of outdated regulation.
“As part of our Plan for Change, we’re determined to ensure every child has the best start to life. We will carefully consider these recommendations and respond fully in due course.”
Competition and Markets Minister Justin Madders said: “The government has been clear through our new Strategic Steer to the CMA that competition and consumer protection will drive economic growth.
“That work to drive better outcomes for consumers across the infant formula market delivers on this priority. We look forward to working closely with the CMA across government to continue to deliver growth as part of our Plan for Change.”
Next steps
Recommendations are made to UK, Northern Irish, Scottish and Welsh governments, working in collaboration with other organisations, where appropriate. The CMA will now engage to explain these measures and support their implementation.
Streaming has changed the way we listen to music. In the UK, more than 80% of recorded music is now listened to via a streaming service rather than using traditional physical media like CDs and vinyl.
Linking the creators making the music and the fans listening to it through a streaming service is a complex network of companies that help make, promote and distribute recorded music.
The Competition and Markets Authority’s (CMA) study will examine the music streaming market, from creator to consumer, paying particular attention to the roles played by record labels and music streaming services.
As part of its assessment of how well the market is working for audiences, the CMA will consider whether innovation is being stifled and if any firms hold excessive power. The CMA’s study will help build a deeper understanding of how firms in the market influence listeners’ choices and experiences.
While focussing on potential harm to consumers, the CMA will also assess whether any lack of competition between music companies could affect the musicians, singers and songwriters whose interests are intertwined with those of music lovers.
If the CMA finds problems, it will consider what action may be necessary.
Andrea Coscelli, Chief Executive of the CMA, said: “Whether you’re into Bowie, Beethoven or Beyoncé, most of us now choose to stream our favourite music.
“A vibrant and competitive music streaming market not only serves the interests of fans and creators but helps support a diverse and dynamic sector, which is of significant cultural and economic value to the UK.
“As we examine this complex market, our thinking and conclusions will be guided by the evidence we receive.”
The CMA has also begun a market study of mobile ecosystems as well as launching the Digital Markets Unit in April 2021 – which is operating in shadow form pending legislation that will provide it with its full powers.
An independent CMA Inquiry Group is also separately investigating Sony’s completed acquisition of ‘artist and label’ services provider AWAL.
The market study takes place in parallel to a wide range of work being done by the UK government in these markets. While the CMA’s work will focus on competition issues, it will maintain a coherent approach with other related work including initiatives being undertaken by the Department for Digital, Culture, Media & Sport, the Intellectual Property Office and the Centre for Data Ethics and Innovation.
