Tangled web: UK regulators crack down on harmful Online Choice Architecture

Harmful online choice architecture (‘OCA’), sometimes inappropriately referred to as “dark patterns”, is a hot consumer protection topic that is increasingly under regulatory scrutiny. In this update, we summarise the latest developments in this area in the UK, and we explain what may change in the future.

What is harmful OCA?

OCA refers to how the design of the online environment (such as websites and apps) can affect a consumer’s decision-making and actions. OCA can be harmful (and illegal) where the online environment deceives, manipulates or misleads consumers in some way, but it is not always easy to distinguish between legitimate practices and practices that are harmful and illegal. Further information can be found in our previous Law-Now.

What enforcement action has happened in the UK so far?

Over the past two years, we have seen enforcement action in the UK being taken specifically against harmful OCA, in reliance on the laws which prohibit unfair commercial practices.

In particular, the Competition and Markets Authority (‘CMA’) announced three investigations into harmful OCA between November 2022 and December 2023. Two were in relation to mattress businesses, and the third was in relation to Wowcher, a deals site. The CMA appears to be focusing on the use of misleading/false price reductions and urgency claims (such as the misleading use of countdown timers). Wowcher and one of the mattress businesses committed to make changes to their practices by signing undertakings in July 2024 (details available here).

However, the first mattress business that the CMA started investigating has not agreed to sign undertakings. and the CMA has initiated court proceedings. Whilst the business appears to have admitted to a number of historic breaches of consumer law and stopped the relevant practices, the main issue in dispute is the CMA’s approach to reference pricing in the context of discounts shown to customers. For example, “Was £199, Now £149”.

This approach was set out in the CMA’s guidance document entitled “Discount and reference pricing principles: selling mattresses online 2024”, published on 1 August 2024 (well after the CMA started its investigations into the mattress businesses). That guidance seeks to impose (amongst other things) a duration requirement and a volume requirement to reference pricing. The CMA’s view is that a price comparison is only genuine (and therefore not misleading) where:

• the duration of the ‘was’ price is not shorter than that of the discounted offer price (the ‘Duration Requirement’); and
• at least 1 product is sold at the ‘was’ price for every 2 products sold at the discounted price (the ‘Volume Requirement’). This requirement aims to ensure that “significant sales” of the relevant product were sold at the previous price.

The principles being challenged before the court

The challenge has a number of limbs, but the most interesting aspect of general application is the challenge to the Volume Requirement: why should it necessarily be misleading to use a strike-through price in circumstances where significant numbers of the relevant product have not been sold at that price?

On an initial glance, the CMA’s viewpoint does not look unreasonable: clearly, if a product with a current (and typical) selling price of £50 had a strike-through price of £1m, it seems likely that no one would have purchased it at the £1m price, and therefore the strike-through price would be misleading. However, arguably, the reason it would be misleading is not because no one (or insignificant numbers of people) purchased the product at that price. Instead, it would be misleading because £1m was never a genuine selling price in the first place. We also do not follow the CMA’s logic in less extreme scenarios. For example, if the same product was sold at £60 for a reasonable period of time (for example, one month) and only one person purchased it, £60 is still arguably a legitimate reference price. There could be other reasons (other than price or how it is displayed) why only one person purchased the product at £60, but more purchased it at £50. For example, marketing (such as an influencer with a large following promoting the product after the price reduction had been applied) or seasonality (or any number of other factors) may impact sales numbers.

It will be interesting to see what the court decides (assuming the matter does not settle beforehand), particularly because (i) UK court rulings in relation to consumer law matters are very rare, (ii) there are no rulings which explicitly relate to harmful OCA, and (iii) the CMA generally does not have a great track record in litigating consumer claims (for example, the Care UK case). It will also be helpful to get the court’s view on the relevant principles as, unlike with undertakings – which is how most CMA consumer cases have historically been resolved – court decisions are binding precedents, and, therefore, the court’s judgment will help shape other retailers’ approaches to price reductions and urgency claims. However, whether the court will go so far as to comment on the precise ratios of the Volume Requirement remains uncertain. It appears that, at various points in their discussions, ratios of 2:1 (rather than 1:2), and also 1:3 and 1:20, were put forward by the CMA and the business.

We are monitoring this case closely and will be providing further updates as the case develops.

Other investigations

Prior to November 2022, the CMA carried out various investigations in relation to practices which were not explicitly described as being due to concerns about harmful OCA, but which (if the investigations happened today) would likely be described as such. For example, the CMA has taken action against various businesses in the past in relation to drip-pricing.

The Advertising Standards Authority (‘ASA’) has also issued a number of rulings which reference harmful OCA. In particular, there were a flurry of rulings in September and October 2024 involving businesses operating in different sectors. These rulings were made in relation to misleading advertising where key product information was omitted; a subscription contract where it was unclear that the contract would auto-renew at a cost unless cancelled before the end of a free trial; and countdown timers which were considered to unfairly pressurise consumers.

Although the UK advertising codes which the ASA enforces do not explicitly mention OCA or “dark patterns”, they include provisions which deal with a range of misleading practices that are often considered to be harmful OCA. This was confirmed in an ASA news update about “dark patterns” which was published in February 2025. Interestingly, the update noted that “their use in advertising is not inherently problematic, however there are some considerations advertisers should bear in mind to ensure they do not mislead”, which suggests that the ASA is focused on tackling obviously egregious OCA (rather than OCA practices where there is room for debate as to whether they are illegal).

ASA rulings are not legally binding on advertisers, and do not involve fines. However, ASA rulings can lead to other enforcers taking action, particularly if conduct is repeated. In this regard, we note that the ASA made a ruling against the same mattress business in relation to misleading price reduction claims and the use of countdown clocks, which is relied on by the CMA in their subsequent action against the company.

What might change in the future?

With effect from 6 April 2025, the Digital Markets, Competition and Consumers Act 2024 (‘DMCC Act’) will include a new unfair commercial practices regime. The new rules restate (with some amendments) the existing rules that are used to tackle harmful OCA concerns. They do not explicitly prohibit harmful OCA, but, generally, will make it easier for enforcers to establish unfair commercial practices. However, there are a few changes to the existing rules which will likely assist regulators when taking action against certain types of harmful OCA. In particular, (i) an existing prohibition in relation to false “very limited time” claims has been amended so that it applies to false “limited” (and not “very limited”) time claims, and (ii) there are changes which will help regulators tackle drip pricing concerns. The new unfair commercial practice rules are supported by a much more stringent enforcement regime, under which (among other things) the CMA can directly impose fines of up to 10% of annual global turnover on a business that does not comply with consumer law (with daily penalties for continued non-compliance), including by (for example) engaging in harmful OCA practices. For more information on the new unfair commercial practices and enforcement regimes, see our separate articles here and here.

In January 2025, the CMA consulted on its draft annual plan for 2025-26, which stated an intention to broaden the CMA’s work to protect consumers from misleading or high-pressure online sales and pricing practices, including by using its new enforcement powers under the DMCC Act. However, the UK Government’s focus on growth has since led to some turmoil at the CMA, with its chairman being suddenly replaced on 21 January 2025. The ousted chairman posted his thoughts on LinkedIn, suggesting that the CMA will adopt a different approach to the one set out in the draft annual plan. The CMA originally committed to publishing a final version of its annual plan by the end of March 2025, so we may have clarity soon about the CMA’s future enforcement priorities. It will also be interesting to see whether the CMA continues with the current legal case in light of political changes.

Assuming that the CMA continues taking enforcement action against harmful OCA practices, its focus appears to be on specific types of harmful OCA only (i.e. misleading pricing and high-pressure tactics). As a minimum, online businesses are therefore advised to ensure that pricing and sales tactics involving pressure or urgency do not breach consumer law. However, we know from various CMA papers that the CMA considers other types of practices to be harmful OCA too. For example, a 2022 CMA paper identifies practices involving sensory manipulation, choice overload and decoys, sludge, dark nudges, drip pricing, and/or information overload as being almost always harmful according to academic literature. Over time, and subject to the political climate and perhaps the outcome of the current case, it seems likely that the CMA may broaden enforcement activity to target other types of harmful OCA. One type of OCA which may escape being a focus area for CMA enforcement relates to the use of defaults, given that a study published by the Department for Business and Trade in November 2024 found that defaults are not generally being used to mislead or otherwise harm consumers and, therefore, that there was no immediate need for legislative intervention to regulate them.

Conclusion

It is highly evident that harmful OCA is increasingly under the microscope of UK regulators. However, this topic is still in its infancy and there is room for a lot of debate about whether some practices that academics and regulators criticise are actually harmful and illegal. Over time, further guidance and enforcement will help clarify the position and give more certainty for businesses operating online. Further afield, this area has also attracted increased interest in the EU, but we will save that for a separate update on another day. Watch this space.