In November 2024 the Competition and Markets Authority (CMA) announced a project to consider how and when dynamic pricing is being used across different sectors of the UK economy and how that may affect consumers and the wider economy/competition in the UK market [Dynamic pricing project – GOV.UK].

This project is not an enforcement investigation and the CMA has stated it is not being undertaken with the objective of identifying breaches of competition or consumer protection law rather, the aims of the project are to:

• support the CMA, government and other stakeholders’ understanding of dynamic pricing and how it can affect consumer outcomes; 
• help businesses by highlighting how transparency around dynamic pricing can help to support consumer trust, confidence and engagement; and
• inform wider consideration by policymakers of the issues associated with dynamic pricing.

On 20 June 2025 the CMA published an update on this project, summarising the key conclusions which it has reached to date [Update: dynamic pricing – GOV.UK] alongside some “top tips” for businesses which make use of dynamic pricing [Tips for businesses using dynamic pricing – GOV.UK].

No single definition of “dynamic pricing”

The CMA has stated that “dynamic pricing” does not have one commonly-agreed definition. For the purposes of this project, the CMA has taken it to refer to situations where businesses adjust prices rapidly and frequently in response to changing demand conditions. The CMA has taken the motivation for adjusting prices, combined with the speed and frequency of adjustment, to be the defining features of dynamic pricing. However, the CMA also notes that in some sectors (such as air travel), dynamic pricing often forms part of a broader “revenue management” strategy with prices also reflecting factors other than demand and supply, such as a competitors’ price.

The CMA is of the view that its definition of dynamic pricing is already common in sectors such as air and rail travel, ride hailing and hotels hence those are sectors where any further action by the CMA is likely to be focussed.

Whilst the CMA is of the view that the use of dynamic pricing is becoming increasingly common in the live entertainment industry, the CMA has stated in this update that some high profile examples of “dynamic pricing” in the entertainment sector did not fall within its definition of dynamic pricing as detailed above, as prices were not rapidly and frequently adjusted in in response to demand. Rather, there were initial releases of tickets at one price and once those sold out, a further release of tickets at a higher price.

Why is dynamic pricing used?

The CMA has concluded that dynamic pricing is often seen in markets where supply cannot quickly adjust to meet demand or where a product is ‘perishable’ and will lose its value after a certain point in time (for example, a seat on a particular flight).

Whilst automation is a key feature of the operation of dynamic pricing models, the CMA has found that in most cases businesses also operated some checks and balances (such as manual/human oversight) to prevent prices rising very steeply and/or to very high levels.

Disclosure of dynamic pricing

The CMA has found that most of the businesses which it spoke to do not expressly tell consumers that they use dynamic pricing or how they set their prices. 

Dynamic pricing not automatically unlawful

The CMA is not of the view that dynamic pricing is always unlawful or inherently wrong or bad noting that dynamic pricing can be consistent with effective competition and good consumer outcomes. However, on the flip side the CMA also notes that it can also lead to poorer customer outcomes in certain circumstances. The CMA goes on to note that dynamic pricing is not unlawful under consumer protection law, but that misleading consumers whether through giving them false or misleading information about a pricing strategy or failing to give them information they need to take an informed decision is prohibited under the Digital Markets, Competition and Consumer Act 2024 (DMCCA) [A New Era for Consumer Law and Regulation | Global IP & Technology Law Blog].

The update notes a number of factors which the CMA considers relevant when making an assessment as to whether dynamic pricing has breached consumer protection laws, such as: whether consumers are willing to resist the temptation to buy at high prices; the extent to which consumers may be put under pressure to make a quick decision; and/or whether vulnerable consumers may be systematically disadvantaged.

When will action be taken?

The CMA has stated that it is more likely to be concerned about the use of dynamic pricing when: 

• consumers are unaware that dynamic pricing is being used or how it may affect prices so cannot make informed choices;
• consumers feel pressured to make quick decisions because prices may rise suddenly;
• vulnerable consumers are particularly disadvantaged such that they pay higher prices than others; and
• dynamic pricing is used to obtain or maintain market power or reduce new entry in a market, which results in higher prices, lower output and harm to consumers, businesses and the UK economy.

Will there be new laws to deal with dynamic pricing?

In short, not for the foreseeable future.

The DMCCA came into force last year with the CMA’s direct enforcement powers under it only coming into force earlier this year on 6 April 2025. As such, there is no appetite for another wholesale change in consumer protection laws for the foreseeable future.

However, the CMA has stated in its update that it views clear and accurate pricing as crucial for consumers’ trust and confidence and so it will continue to actively review pricing practices and act when it sees egregious conduct. The CMA will also advise the government if it thinks there are any gaps in current consumer protection law that do not provide adequate protection for consumers and fair dealing businesses.

What may be more likely though are sector specific interventions by the CMA as it has stated that whilst current consumer protection laws can be used to tackle a lot of harms arising from the use of dynamic pricing there are instances where the impact of dynamic pricing on consumers and businesses is dependent on the features of particular sectors. That may mean that sector-specific interventions are the most proportionate and effective way to tackle problems arising in the affected sectors rather than changes to wider more general consumer law. 

Compliance guidance

In addition to publishing an update on its dynamic pricing project the CMA has at the same time published some tips for businesses using dynamic pricing designed to help them stay on the right side of the law [Tips for businesses using dynamic pricing – GOV.UK].

These tips are in short that businesses should:

• be transparent about pricing;
• be clear that prices can change;
• consider what consumers need to know;
• present information clearly;
• explain important terms;
• consider vulnerable consumers;
• not force consumers to make snap decisions; and
• not change prices whilst consumers are paying.