A Wake-up Call On Reference Pricing: High Court Rejects CMA's 1:2 Ratio

The High Court has now handed down its judgment on the enforcement order sought by the Competition and Markets Authority (CMA) against Emma Sleep, in connection with the use of reference pricing (including was/now pricing). The Court found that Emma Sleep had infringed consumer protection law in respect of a number of admitted breaches, but declined to find that Emma Sleep had committed infringements more generally or to grant the enforcement sought by the CMA.

Most notably, the Court refused to impose the CMA's proposed 1:2 fixed volume requirement, under which at least one product would need to be sold at the reference price for every two products sold at the discounted price, in order for the reference price to be considered non-misleading. The Court held that failing to meet such a ratio would not, of itself, amount to a breach of consumer law.