Deceptive Nudges keeping you up at night? The CMA targets online retailers for exploitative sales tactics

Ted Utoft

UK CEO & Global Chief Growth Officer,

BVA Nudge Consulting

In October, the UK Competition & Markets Authority (CMA) launched court action against Emma Sleep after the mattress retailer failed to “make all the changes” to the online sales tactics the CMA highlighted in an initial 2022 Investigation.

The CMA have scrutinised two (2) sales practices:

Misleading ‘was/now’ discounts where retailers show original, higher prices and present, cheaper prices to entice consideration. The CMA found evidence that “only a small fraction of Emma Sleep products was actually sold at ‘full’ price” and therefore
brought the validity of these discounts into question.
Misleading ‘countdown clocks’ which were quickly replaced by new countdown clocks
upon lapsing. The CMA stated that these countdowns can give the impression that
certain discounts will end soon – which is misleading if there’s always another discount
around the corner.

A price comparison is genuine – according to the CMA – if: retailers offered the ‘was’ price for a “sufficient period of time” before the discount began, and if a “sufficient number” of products were sold at the ‘was’ price.

The CMA do not seem to be targeting specific sales strategies – rather, the UK regulator is wary of any deceptive tactic that exploits consumer psychology.

The growing importance of consumer psychology in consumer law is sector-agnostic and UK-wide.

In 2019, the CMA agreed conduct changes with 25+ online travel agencies and hotels as part of their ongoing consumer enforcement programme focused on “Online Choice Architecture” (e.g., luring consumers into considering hotel rooms with an initially low advertised price and adding on mandatory charges like cleaning fees until the point of checkout).

In 2022, the financial services regulator (FCA) introduced the Consumer Duty, requiring all financial services firms to account for consumer psychology at all stages of the product lifecycle. And from January 2025, Ofcom secured changes to how mobile phone providers communicate annual price changes, recognising that inflation and interest rates are difficult for most people to calculate and budget for.

The line between psychologically exploitative marketing and what used to be considered standard practice can sometimes seem blurred.

Following on from James’ thoughts for the hospitality sector, we have some questions online businesses can ask themselves to check whether they may be in the regulatory firing line:

Step #1 – Are you being transparent?

Are you providing consumers the information they want or need to make an informed decision about your product / service?
Or are certain details and terms less eye-catching than others (contract details
or offer caveats in low resolution, small font sizes, etc.)?

Step #2 – Are you using pressure tactics?

Are you pushing consumers to make a decision in a limited timeframe?
Are you exaggerating demand for or supply of your product (e.g., “buy now, only X units left”)?
Are any deadlines or sale end-dates manufactured or misleading (e.g. a
resetting countdown clock)?

Step #3 – Are you trying to create positive emotions in your customer experience?

How do you expect customers to react to your marketing tactics? With
excitement at the opportunity to access a great product / service? Or fear and frustration that they could miss out?

As the Digital Markets Competition and Consumers Act was published earlier this year, the CMA anticipates having the power to decide whether consumer law has been broken and fine businesses up to 10% of global turnover.

We recommend all businesses operating online keep consumer psychology at the core of their marketing and CX/UX strategy, or you might have a few sleepless nights coming your way.

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The contents of this publication are for reference and informational purposes only and may not be current as at the date of accessing this publication. The contents herein do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.