The UK Competition and Markets Authority published an open letter to online retailers on November 2 reminding them that a mandatory delivery fee must sit inside the price shown, from the first advert to checkout. The letter is addressed to retailers, but the law behind it covers the delivery fees, service charges and resort fees that UK restaurants and hotels add to online prices.
According to the CMA letter, the Digital Markets, Competition and Consumers Act 2024 requires the total price at every stage where a price is given, including “advertising, product pages, carts and baskets, checkout and payment pages.” The CMA says it has already enforced the drip pricing rules against 4 businesses, with fines of more than £5.1 million and refunds of more than £1.35 million.
What it means for hotel and restaurant operators
The CMA’s price transparency guidance (CMA209) names hospitality charges in its list of fees that belong in the total price, including “mandatory cover or service charges at a restaurant” and “resort fees and other unavoidable charges that become payable on arrival or departure at hotels”. Its worked example of a seven-night resort stay at £150 a night plus a £25 per person nightly resort fee shows the advertised price as £1,400 for two people. A refundable card pre-authorisation at check-in does not count as a mandatory charge.
For UK operators, the check runs through the technology that displays prices: the hotel booking engine and metasearch feeds, restaurant ordering apps and the online menus behind them. Each needs to show unavoidable fees in the first price and in every basket total. Restaurant groups that run their own ordering and payment flows, a model we covered in Olo’s commission-free app for restaurant chains and Lightspeed’s Scan to Pay, carry this display duty themselves.
Source: Competition and Markets Authority, open letter to online retailers
