In today's digital age, social media has revolutionised the way we shop. From Instagram boutiques to TikTok Shop, the convenience of online shopping has never been more accessible.

Whilst it may seem that these new routes to market allow freedoms not enjoyed by sellers before, it is important to remember that the law that applies elsewhere online or to traditional bricks and mortar shops will continue to apply and, in particular, the recently implemented Digital Markets, Competition and Consumers Act 2024 (the “DMCCA”) will have a significant impact. 

This DMCCA has many impacts on businesses, including updating the law in relation to protecting consumers from unfair misleading and aggressive practices. The Act specifically bans fake reviews and “drip pricing”. Additionally, a section providing additional protections to consumers in relation to subscription contracts is expected to come into force in 2026. 

For retailers one further element of the DMCCA to be particularly aware of is the beefing up of the enforcement provisions around Unfair Commercial Practices. The DMCCA appoints the Competitions and Markets Authority (“CMA”) as an enforcement body that is able to issue fines (as well as the Courts’ powers under the Act). Those fines can also be substantial and up-to 10% of a company’s group global turnover – so it is absolutely something that should be a priority for businesses to get right. 

One trend that has caused concern, particularly on TikTok Shop is the phenomenon of flash sales, that offer seemingly great bargains for a very short time. However, often these deals may not be quite what they originally appear to be. In many cases, as the deal runs out (or shortly after it runs out) the same products are offered at the same or very similar price. In other cases, one deal (for example a price reduction from £50 to £10) is replaced by another deal (eg the price is now stated to be £30), but the original reference price (of £50) is still used, even though the product has been on sale at a lower price (of £10) since that price (of £50) was charged. Each of these types of behaviours are potentially problematic as they can mislead consumers – indeed falsely stating that a deal is only available for a limited time in order to elicit an urgent decision from a consumer is specifically listed as a banned action under the DMCCA (as it was under earlier legislation). 

The CMA and Trading Standards have been active in relation to urgency claims and misleading pricing over the last couple of years and have issued two significant pieces of guidance for businesses; one being an open letter to retailers with a number of examples of problematic claims, and another being a report on a sectoral investigation on sales promotions in the online mattress sector. Even though these pieces of guidance were issued under legislation that has been updated by the DMCCA, they are still considered relevant for the new legislation.

In its report on the online mattress sector, the CMA made it clear that there are two elements that need to be complied with when making a price comparison claim:

• First, you have to look at the duration of the offer - the “was” price has to be offered on the same website for a sufficient period of time immediately before the discount is applied. The duration of the “was” price cannot be shorter than the duration of the offer price; and
• secondly, a sufficient number of sales have to have been made at the “was” price. At least one product must have been sold at the “was” price for every two products sold at the discounted price. 

TikTok Shop is still a relatively new phenomenon and the CMA has not made any public comments on it or the way in which the price promotion sales operate on the platform. However, in the online mattress report the CMA suggested that a period of 30 days was a suitable period for establishing a “was” price (although, for a promotion of no longer than 10 days, it did acknowledge that 21 days could be sufficient). In TikTok Shop, it appears in many cases that people are trying to establish a “was” selling price using very short time frames which are measured in hours rather than days. Of course, it could be that the CMA looks at TikTok Shop and says that in this environment consumers know how pricing can fluctuate rapidly, and therefore allow a much shorter window to establish a “was” price. However, as noted above, one of the potential issues with some TikTok Shop sellers is that they appear to be using one “was” price, even though that price has not been used for some time – which goes against the requirement that the “was” price should be the price charged immediately before the promotion price. 

Platform owners such as TikTok do publish guidelines and require sellers to comply with these guidelines as well as applicable law and they will take action against sellers if they are in breach of these. However, a further complicating factor of social media shops is the low barrier to entry – a lot of the sellers are very small businesses and if they encounter issues and are removed for a breach of guidelines they (or a connected party) could potentially reopen a shopfront under slightly different details pretty quickly. The DMCCA seeks to assist with this as well by bringing in a concept that the platform can also have liability for any involvement in misleading acts or omissions. There is a defence of “innocent publication” for people who simply publish someone else’s adverts and had no reason to know that the publication of the advert would be an offence. Again, as this is a new provision in the legislation, we have no real visibility as to how the CMA will use this power to involve the platforms – but it would seem that a particular price behaviour is rife on a platform then it wouldn’t be surprising to see the CMA approaching that Platform owner and asking them to take action of make changes to its tools to prevent behaviours that are potentially misleading consumers.

Richard Parkinson’s interview with Mariam Musa on Channel 4 discussing the phenomenon of flash sales on TikTok Shop which offer seemingly great bargains for a very short time.