Who: The High Court of England and Wales, the Competition and Markets Authority (CMA) and Emma Matratzen GmbH (Emma Sleep)
Where: United Kingdom
When: 30 July 2026
Law stated as at: 18 September 2026
What happened
The High Court has refused the CMA’s application for an enforcement order that would have required Emma Sleep to adhere to a 1:2 “fixed volume requirement” (FVR) in relation to its use of reference pricing.
Emma Sleep’s pricing practices under the CMA’s scrutiny
Emma Sleep’s business primarily involves selling mattresses online to UK consumers. The CMA opened an investigation into Emma’s online sales practices in 2022. The parties subsequently worked together to address many of the CMA’s concerns, resulting in a consent order in May 2026 after Emma admitted infringements of consumer law in relation to its use of “urgency messaging” (countdown timers, headline discount claims and high demand claims) and gave undertakings not to continue or repeat such conduct.
The remaining concern centred on Emma’s use of “reference pricing”, or “was/now” pricing. Emma agreed to adhere to the “duration requirement”, which precludes it from using a reference price unless the product has been offered for sale at that price for a particular length of time. However, the parties could not agree on the CMA’s proposed 1:2 FVR, as set out in its guidance “Discount and reference pricing principles: selling mattresses online“, which would require that for every two products sold at the discounted price, Emma must have sold one at the higher reference price.
The CMA argued that if substantially all sales are made at the discounted price, it is misleading to suggest consumers are getting a good deal, since the discounted price is in effect the usual price.
The proceedings fell to be determined under the “old law”, the Consumer Protection from Unfair Trading Regulations 2008, now repealed and reinstated by the Digital Markets, Competition and Consumers Act 2024 (DMCCA), enforced via Part 8 of the Enterprise Act 2002, as they were issued before the relevant DMCCA regimes became effective.
Through the eyes of an average consumer
The court had regard to the perspective of an average consumer, which it described as the “touchstone” of whether conduct amounts to a “misleading action”. The court acknowledged that an average consumer would have some regard to the number of sales made at the reference price when assessing whether it is “genuine” or “realistic”. However, an average consumer visiting Emma’s website is not entering a competition to secure a lower price than 50%, 33% or 25% of other purchasers of the same mattress. Such a consumer would not, therefore, consider that whether a price is realistic can be determined solely by reference to a fixed 1:2 FVR.
The seller’s genuine belief
The court further held that an average consumer would also consider whether Emma had a genuine and reasonable belief that a reference price was a realistic price for the product in question and that it could make significant sales at that price, given that Emma can be expected to know the market in which it operates. The court also referenced the Advertising Standards Authority (ASA) and the Chartered Trading Standards Institute’s guidance, which it considered aligned with its conclusion on the perspective of an average consumer.
Accordingly, even if sales at a reference price did not satisfy the 1:2 FVR, an average consumer might still regard the reference price as genuine and realistic if Emma held a real belief that it could sell significant quantities at that price.
The CMA’s argument that use of a reference price is necessarily misleading if almost all sales are made at the discounted price was therefore flawed.
By way of illustration, the court posited a scenario in which Emma offered a mattress at £1,000, genuinely believing this to be a realistic price, but, unknown to Emma, a competitor was offering a comparable mattress for £800. As a result, Emma made no sales at the reference price. If Emma then discounted the mattress to £750, the court considered that purchasers on the first day of the promotion would not necessarily regard the £1,000 reference price as unrealistic, even in the absence of any sales at that price. However, the longer the mattress continued to be advertised at the discounted price, the less realistic the reference price would become.
Not the end of the story
The court held that the CMA had not established that Emma lacked a genuine belief that its reference prices were realistic and achievable. While it concluded that Emma had committed some infringements and the pre-conditions for making an enforcement order were present, it declined to make one in the form requested.
The court noted that Emma’s admitted breaches involved much different FVR metrics (some around 1:50,000), and that imposing a 1:2 FVR would “involve a very real risk that the line is being drawn in the wrong place.” Emma submitted that adherence to a 1:2 FVR (following the launch of the CMA’s investigation) caused a decline in its business fortunes. While the court could not find that this was the case, it held that it would be disproportionate to require Emma to run that risk given the issues identified with a 1:2 FVR.
It also pointed to the potentially serious sanctions that would apply under the DMCCA in case of a breach of an enforcement order imposing a 1:2 FVR in circumstances where no infringement had actually been committed, given the countervailing considerations such as Emma’s subjective intentions and beliefs.
The court directed that the parties should liaise with a view to agreeing on the terms of an enforcement order consistent with the court’s conclusions. Following the judgment, the CMA has temporarily withdrawn its guidance.
Why this matters
Reference pricing is an area of increasing regulatory focus for the ASA, which has been proactively enforcing the rules from an advertising perspective, and the issue is now attracting government attention. The court emphasised the importance of a seller’s genuine subjective belief in its ability to make significant sales at the reference price, at least in the mattress sector. It also noted, however, that the longer a product continues to be sold at the discounted price, the less realistic the reference price becomes, making the duration of sales matter. This judgment is important reading for businesses that rely on reference price claims, but it remains unclear for now whether an FVR test will remain a relevant consideration and, if so, at what level.
