High Court rejects CMA's fixed ratio rule for mattress discount pricing in Emma Matratzen case

The High Court has declined to impose a fixed volume requirement on the online mattress retailer Emma over its use of reference pricing, rejecting the Competition and Markets Authority's central enforcement proposal despite finding that the company had committed some breaches of consumer protection law.

In Competition and Markets Authority v Emma Matratzen GmbH and Others [2026] EWHC 1995 (Ch), Mr Justice Richards refused to make an enforcement order under section 217 of the Enterprise Act 2002 requiring Emma to maintain a 1:2 ratio between mattresses sold at a discounted price and those sold at the higher reference price used to advertise that discount, finding the proposed rule was not properly tethered to the concept of misleading conduct under the Consumer Protection from Unfair Trading Regulations 2008.

The CMA's investigation, opened in 2022, examined Emma's practice of advertising mattresses using struck-through reference prices, such as "was £1,000, now £500". While Emma had already resolved concerns over separate "urgency messaging" practices and accepted duration requirements limiting how quickly a reference price could be introduced before a sale, it resisted the CMA's fixed volume requirement, under which a reference price could only be treated as genuine if roughly one in three units offered had actually sold at that higher price.

Emma admitted specific instances of unlawful reference pricing, including advertising new products against reference prices never actually charged, and using prices not charged immediately before a promotion began. However, it disputed that the CMA's broader "high price/high discount" characterisation of its overall strategy amounted to a wider pattern of misleading conduct.

The judge, sitting under CPR Part 8 without cross-examination, accepted largely unchallenged evidence from Emma's co-founder that mattress purchases are infrequent, high-value and non-urgent, meaning consumers can readily defer buying until they perceive a good deal, a dynamic that itself drives seasonal discounting across the sector regardless of any deceptive practice. Central to the judgement was the finding that an average consumer's perception of whether a reference price was genuine depended not solely on the proportion of units actually sold at that price, but also on whether Emma held a genuine belief, informed by its knowledge of a competitive market, that the reference price was realistic. Drawing on guidance from the Advertising Standards Authority and the Chartered Trading Standards Institute, both of which treat low sales volumes as relevant but not determinative, the judge illustrated this with hypothetical scenarios in which a retailer's reasonable but mistaken pricing, followed by a rapid discount to reflect market reality, would not necessarily mislead early purchasers even where sales at the original price were minimal or non-existent.

Applying that reasoning, the judge held that the CMA's proposed rule, which treated Emma's subjective beliefs as irrelevant, rested on an incomplete analysis and risked capturing conduct that would not, on a proper assessment, mislead the average consumer. He was further troubled by the disparity between a 1:2 ratio and the far more extreme figures involved in Emma's actual admitted breaches, some approaching a ratio of 1 in 50,000, concluding there was a real risk the CMA's proposed line was drawn in the wrong place. Given the severe penalties, including turnover-based fines, that would attach to breach of any enforcement order under the incoming Digital Markets, Competition and Consumers Act 2024, the judge considered it would be disproportionate to impose a blanket ratio requirement.

Having found that Emma had nonetheless committed the admitted infringements sufficient to engage the court's jurisdiction to make an enforcement order, the judge invited the parties to attempt to agree appropriate terms reflecting his conclusions, with any unresolved issues to be determined at a further hearing.