Discount claims after Emma Sleep: what this means for your business

On 30 July 2026, the High Court handed down its judgment in the Competition and Markets Authority’s (“CMA”) long-running case against Emma Sleep (“Emma”), refusing to make the specific enforcement order sought by the CMA in relation to Emma’s use of reference pricing (i.e. “was/now” discount claims).

The decision is arguably the most important UK judgment on reference pricing for many years. It rejects the CMA’s attempt to convert one pricing metric, a proposed 1:2 fixed volume requirement (“FVR”), into a bright-line legal standard. Had the CMA been successful, the FVR would have required Emma to sell at least one unit at the higher reference price for every two units sold at the discounted price.

The judgment does not, however, give businesses a blank cheque to advertise discounts as they wish. Emma had already admitted a number of consumer law breaches earlier in the proceedings relating to:

• countdown timers that suggested a promotion or discount was available only for a limited period;

• high demand messaging that implied unusually high levels of consumer interest or purchasing activity; and

• headline discount claims, including certain "was/now" and percentage-off representations.

The Court's rejection of the CMA's proposed FVR marks an important limit on the regulator's ability to treat a single sales volume ratio as determinative of whether a "was/now" price is misleading, but it does not disturb the admitted breaches on urgency and headline discount claims.

For retailers, brands and online platforms, the practical message is clear: reference pricing remains firmly on the enforcement agenda, but whether a discount is misleading depends on the overall context, including the product, the market, the consumer journey, the trader’s pricing rationale and the evidence supporting the reference price.
 

Key Takeaways

• A low number of sales at the higher price does not automatically make a discount misleading.

• The CMA cannot treat a fixed sales-volume ratio as a substitute for the statutory test.

• The statutory test for a misleading action includes one that contains false information or has an overall presentation likely to deceive on specified matters (including price or the existence of a price advantage), and is likely to cause the average consumer to take a transactional decision they would not otherwise have taken.

• Context matters: product characteristics, consumer behaviour, market practice and the trader’s commercial rationale are all relevant.

• Businesses should retain evidence showing why the reference price was genuine and commercially realistic.

• The judgment is helpful for businesses, but it does not reduce the CMA’s new enforcement powers under the Digital Markets, Competition and Consumers Act 2024 (“DMCCA”).

Background

Emma is a German mattress retailer that launched in the UK in 2017. In November 2022, the CMA opened an investigation into Emma’s online selling practices under the consumer protection regime that preceded the DMCCA, focusing on its “high price/high discount” strategy, countdown timers, “high demand” messages and other urgency-based prompts.

By May 2026, part of the case relating to urgency and pressure-selling had been resolved by a consent order, capturing the admitted breaches summarised above. The consent order is backed by a penal notice, exposing Emma to contempt of court and other significant penalties for any future breach.

What remained was the more contentious question of whether Emma’s use of "was/now" reference pricing misled consumers. Reference pricing includes statements such as “was £1,000, now £500”, or the use of a struck-through higher price next to a lower current price.

In June 2026, the CMA took the matter to a three-day trial arguing that Emma should be required to comply with a 1:2 FVR. Emma resisted, and the question for the Court was whether the CMA could impose that ratio as part of an enforcement order.
 

What did the Court find?

The Court rejected the CMA’s application. Richards J held that the CMA had not established that Emma’s use of reference pricing was misleading in the way alleged, and that the proposed FVR was neither justified nor proportionate. Key points from the Court’s reasoning that are particularly important:

1. A sales ratio is relevant, but not determinative

The Court was clear that low, or even no, sales at the higher price does not automatically mean that consumers have been misled. Sales volumes may be relevant evidence, but they are not the legal test. The legal question remains whether the average consumer is, or is likely to be, deceived. That assessment cannot be reduced to a single number.

2. Context matters

The judgment places considerable weight on the position of the average consumer. The Court accepted that mattresses are relatively high-value, infrequent purchases and that consumers are likely to research products, compare prices and wait for a promotion before buying. A consumer who sees a mattress priced at £1,000, waits, and then buys when it is reduced to £750 may not feel misled simply because few other consumers bought at £1,000. They may consider that their decision to wait has been vindicated.

This does not mean that all markets will be treated in the same way. For lower-value, fast-moving or impulse purchases, consumers are less likely to research prices, compare offers or wait for a promotion. In those categories, businesses should not assume the Emma reasoning will protect them, and reference pricing, urgency messaging and headline discounts should be reviewed against the specifics of the product and the typical consumer journey.

3. The trader’s belief is relevant, but not decisive

The Court considered that the CMA had given insufficient weight to Emma’s subjective belief that it could achieve significant sales at the advertised “was” price. A trader’s belief will not, by itself, make a discounted price lawful. However, if a business can show that it genuinely believed the price was realistic and capable of generating meaningful sales, that may be relevant to whether the non-discounted price was genuine rather than artificially inflated.

The business should be able to explain why the higher price was commercially credible at the time it was set, supported by contemporaneous evidence (see the Practical implications section below).

4. Proportionality matters, especially under the new regime

The Court was concerned that imposing a 1:2 FVR would have exposed Emma to potentially serious consequences for breaching an enforcement order, even in circumstances where the underlying conduct might not amount to a consumer law infringement.

That concern is especially significant under the DMCCA regime, where the CMA can now impose substantial penalties directly. For further information about the new consumer protection regime, please see: Seller beware: The new consumer protection and enforcement rules under the DMCCA are now in force | Stephenson Harwood. Against that backdrop, the Court was reluctant to endorse an order that risked turning a disputed compliance metric into a punitive standard.
 

What happens next?

The judgment is not the end of the proceedings. Emma admitted certain infringements during the case, and the Court has invited the parties to agree the terms of a revised enforcement order reflecting the judgment. If they cannot agree, the Court is expected to determine the appropriate form following further submissions.

The CMA has also withdrawn its online mattress sales guidance, which had referred to the 1:2 FVR.

Separately, the UK Government has announced a consultation this autumn on potential additions to the list of banned practices under the DMCCA.¹ Potential additions could include fake “was” prices, invented discounts and misleading recommended retail prices. That consultation may become a route through which some of the issues raised in Emma are addressed legislatively rather than through case-by-case enforcement.
 

What does this mean under the DMCCA?

Businesses should be careful not to over-read the judgment. The Court rejected the CMA’s proposed FVR; it did not say reference pricing is lawful in all cases. Under the DMCCA, the CMA can now impose penalties of up to 10% of worldwide turnover for consumer law infringements without first having to prove a breach in court.

The likely result is not less enforcement, but enforcement using different tools. Although the CMA is less likely to frame future cases around an FVR, it will continue to scrutinise discount claims, urgency messaging, drip pricing, subscription practices and online choice architecture, and the forthcoming Government consultation on banned practices signals that pricing remains firmly on the policy agenda. Pricing should therefore be treated as a board-level compliance issue, with clear ownership, documented rationale and periodic review across the whole consumer journey.
 

Practical implications for businesses

The judgment is helpful for businesses, but it should not be read as a green light for aggressive discounting. Reference pricing remains an area of regulatory risk, particularly where promotions are frequent, discounts are large, the higher price is rarely achieved, or the promotional message creates a false sense of urgency.
 

Businesses should consider the following steps

• Document the rationale and retain supporting evidence: The Court placed weight on the trader’s subjective belief in the genuineness of its higher price. Businesses should keep clear records of how “was” prices, introductory prices and other comparison prices are set, and retain contemporaneous evidence supporting them — including pricing committee papers, competitor benchmarking, historical sales data, margin analysis, demand forecasts and promotional calendars. The higher price should be defensible as commercially credible, not chosen to maximise the apparent discount.

• Assess the whole consumer journey: No single metric determines whether reference pricing is misleading. Businesses should assess pricing claims alongside the wider presentation of the offer, including countdown timers, stock or demand messages, “limited time” claims, website design, auto-renewal messaging and the ease with which consumers can understand the deal.

• Review pressure selling tactics: Emma’s admitted infringements are a reminder that the CMA remains focused on countdown timers, high demand claims, limited time offers and other behavioural prompts. These practices should be reviewed carefully, particularly where offers roll over, are repeatedly extended or are not genuinely linked to stock availability or promotion end dates.

• Monitor regulatory developments: The withdrawal of the CMA’s mattress guidance and the forthcoming Government consultation mean this area remains in flux. Businesses should keep pricing policies under review and be ready to update compliance processes as the CMA and Government clarify their approach.

We advise retailers, brands and online marketplaces on pricing compliance, CMA investigations and DMCCA readiness, including pricing governance frameworks, evidence retention, sales and marketing training, and responding to the forthcoming Government consultation on banned practices. If you would like to discuss how this judgment affects your business, please get in touch.

¹ https://www.gov.uk/government/news/pm-starts-roll-out-of-everyday-fixes-on-the-cost-of-living-ending-rip-off-discounts-and-subscription-traps