Digital Fairness Act Unpacked: Unfair Pricing Practices

What pricing practices are addressed by the consultation?

The consultation focuses on three pricing practices which are common in the digital world:

• Drip Pricing – failing to disclose upfront mandatory costs and fees for a product or service and adding them later during the booking process;
• Dynamic Pricing – advertising attractive “starting” prices whilst automatically applying dynamic price increases via software which adjusts pricing in "real time"; and
• Misleading Price Reductions – price comparisons based on vague reference prices that give a false impression that there has been a price reduction.

How are these pricing practices currently regulated, and what is the Commission discussing?

EU consumer law and guidance already regulate each of these pricing practices at least to some extent, and the consultation seeks to collect thoughts on whether or not current regulation is sufficient and whether more effective enforcement would suffice to address the issues. In addition, it requests views on specific proposed regulatory or non-regulatory measures in relation to each pricing practice. In this section, we have outlined the current regulatory and enforcement position in respect of each of the three pricing practices in scope of the consultation, and the EU's proposals for addressing concerns relating to these practices.

A. Drip Pricing

Current Regulation

• Unfair Commercial Practices Directive (UCPD). The UCPD prohibits unfair commercial practices, including misleading actions or omissions or aggressive practices that cause (or are likely to cause) a consumer to take a transactional decision that they would not have otherwise made. Where there is an invitation to purchase, traders must make material information about a product available, including the total price, or where the price cannot reasonably be calculated in advance, the manner in which it is calculated (Art. 7(4)(c), UCPD).
• UCPD Guidance. The Commission’s guidance explains that the inclusive price requirement is breached if mandatory taxes, fees or charges are omitted upfront and added only later. Positioning unavoidable charges as “optional” and then rendering them unavoidable during checkout is also likely to mislead.
• Consumer Rights Directive (CRD). The obligation to show the total price of a product (i.e. the price inclusive of taxes and, where applicable, all additional freight, delivery or postal charges) is also caught by the pre-contractual information requirements under the CRD.
• Sector-specific rules. Specific regulations also apply to certain sectors, such as the airline industry.

Are these rules already enforced?

Drip pricing has long been a focus of enforcement across the EU. Coordinated sweeps across industries such as travel booking and car rental by the Consumer Protection Cooperation (CPC) have repeatedly identified failures to show the full price early in the consumer journey and to disclose unavoidable extras (such as booking or delivery fees) clearly and upfront. At a national level, enforcement has been brought in sectors such as travel, ticketing, car rental and food delivery – as well as more granularly in relation to particular traders.

What specific measure is being considered?

The consultation is seeking views on an outright prohibition on drip pricing. The UK recently banned drip pricing under its Digital Markets Competition and Consumers Act by requiring all material information, including total price, to be displayed on an invitation to purchase regardless of its impact on consumers. The EU may seek to take a similar approach.

B. Dynamic Pricing

Current Regulation

• No outright prohibition. EU consumer law does not prohibit dynamic pricing. Traders are free to determine the prices they charge provided that consumers are adequately informed about the total price (or if it can't be reasonably calculated in advance, how the price will be calculated) and, where applicable, about the fact that a price was personalised.
• UCPD. In some circumstances the use of dynamic pricing could be considered an unfair practice under the UCPD. For example, price increases late into the booking process, advertisement of lower prices than the trader offers in reality, or rapid pricing changes putting consumers under psychological pressure to act quickly may be considered misleading or aggressive practices.
• Competition Law. Dynamic pricing can also be captured by Art. 102 of the Treaty on the Functioning of the European Union (TFEU) if it amounts to the imposition of excessive prices. However, its application is limited to dominant undertakings and whether pricing is excessive is determined by the relationship between a dominant undertaking’s costs and profits rather than on its pricing mechanisms.

Are these rules already enforced?

In the EU's Digital Fairness Fitness Check, which was the first step towards the DFA consultation, the Commission outlined particular concerns in relation to dynamic pricing in the event ticket sector. At EU level, there has been no enforcement in relation to dynamic pricing in this industry. 

What specific measure is being considered?

The consultation is seeking views on a restriction on advertising "starting” prices if a trader uses dynamic pricing which renders such starting prices unrealistic for a majority of buyers. The aim is to prevent headline prices that are rarely available in practice.

C. Misleading Price Reductions

Current Regulation

• Price Indication Directive (PID), as amended by the Omnibus Directive. Price discounts on goods are regulated particularly by the PID. One of the most controversial rules on price discounts is Art. 6a PID, introduced by the Omnibus Directive in 2022. According to Art. 6a PID, the trader must display the prior price, defined as the lowest price offered in the 30 days prior to the price discount being offered (”30-day rule”). As well as specific price reductions such as strike-through or was/now-pricing, the rule also captures general discount claims such as “Deal”, "Sale" or "Black Friday Discounts". Exceptions to this rule vary across member states, but often apply to perishable goods, new product arrivals and progressive price reductions. Some member states also extended the scope from physical goods only to service and/or digital content or digital services.
• UCPD. Other elements of a pricing comparison (such as very long or recurring discount periods) and pricing comparisons to other reference prices (such as recommended retail prices (RRP) or a competitor's price) are regulated by the UCPD if they mislead consumers and affect their transactional decision. The UCPD also regulates services including digital services and digital content, where they lie outside the PID’s scope.

Are these rules already enforced?

Since the implementation of the “30-day rule”, there has been significant enforcement activity in the EU. In October 2024, in a case concerning Aldi Süd's pricing practices, the CJEU reinforced that price reduction announcements must be based on the ‘prior’ price as meant in the PID (i.e. the lowest price in the preceding thirty days, unless an exception applies). In addition, there is an increasing body of national case law restricting the use of alternative reference prices and particularly price comparisons with the RRP.

What specific measure is being considered?

The consultation asks whether the advertisement of price comparisons should only be permitted if the product is actually offered by other traders to consumers at the reference price used. The Digital Fairness Fitness Check findings didn’t examine misleading pricing reductions, so what such a measure may look like is not completely clear, however, one possible outcome could be an outright prohibition on references to RRPs where no trader is, in practice, selling the product at that price.