CMA v Emma Sleep: High Court rejects the CMA's fixed volume requirement for reference pricing

On 30 July 2026, the High Court handed down its judgment in Competition and Markets Authority v Emma Matratzen GmbH & Others. As discussed in our earlier article, the case centred on Emma Sleep's use of "was/now" pricing and whether Emma Sleep should be subject to Competition and Markets Authority’s (CMA) proposed 1:2 fixed volume requirement (FVR).

A 1:2 FVR would mean that for every two products offered for sale at the lower price, Emma Sleep would need to sell, or have sold, one product at the higher reference price.

The Court declined to endorse the CMA's proposed 1:2 FVR and rejected the CMA’s broader argument that low sales volumes at a reference price are, by themselves, sufficient to establish that a reference price is misleading.  

The Court has now asked the CMA and Emma Sleep to work together to identify an alternative Order that does not include a 1:2 FVR.

Five key takeaways from the judgment

1. This may signal the end of fixed volume requirements in CMA guidance

The CMA wished to secure an enforcement order requiring Emma Sleep to comply with a 1:2 FVR, which was already enshrined in its online mattresses reference pricing guidance (and which the CMA reserved the right to apply in other sectors). The Court declined to impose such a requirement, finding that a failure to satisfy a fixed ratio would not necessarily mean that consumer law had been breached.  The CMA has subsequently withdrawn its controversial online mattresses reference pricing guidance. This is likely to prompt a rethink in terms of how any future CMA guidance deals with this issue.

2. Sales volumes matter, but they are not determinative

The Court accepted that the proportion of products sold at the higher reference price is relevant when assessing whether a pricing claim is misleading. However, it rejected the CMA's argument that low sales volumes alone demonstrate that a reference price is not genuine or realistic. The Court adopted a broader, more fact-specific assessment, holding that the analysis must take account of all relevant circumstances rather than relying on a single numerical threshold.

3. Consumer behaviour remains central

A recurring theme throughout the judgment is consumer purchasing behaviour. The Court accepted evidence that mattresses are relatively expensive, infrequent and generally non-urgent purchases, meaning consumers may actively wait for promotions before deciding to buy. A consumer purchasing a mattress reduced to £750 from £1,000 after several weeks would still consider £750 a good deal, even if no mattresses had been sold at the higher price, because the consumer had seen the previous price and chosen to wait. The Court concluded that the fact many consumers purchase during promotional periods does not automatically mean that the higher reference price was unrealistic or misleading. The Court did, however, flag that if "many weeks later" the same reference price continued to be used, consumers might begin to doubt whether it was genuine. The judgment therefore reinforces the importance of analysing how consumers are likely to behave in a particular market, and the duration for which a reference price has been maintained, when assessing pricing claims.

4. A trader's genuine belief may be relevant

The Court also took into account what it saw as Emma Sleep's genuine belief that the reference price represented a realistic selling price. The Court held that an average consumer would regard it as relevant whether a trader genuinely believed that products could be sold at the stated reference price. Importantly, the Court clarified that a trader's subjective beliefs alone would not be conclusive, but that where those beliefs were also objectively reasonable, this would support the case that the reference price was genuine and not misleading. While the Court stopped short of creating a formal legal test based on subjective belief, it concluded that the CMA's approach placed insufficient weight on wider contextual factors, including the trader's own assessment of its pricing, that may be relevant when assessing whether a reference price is genuine or realistic.

5. Proportionality matters

Another important theme running through the judgment is proportionality. The Court expressed concern that imposing a rigid FVR could expose Emma Sleep to what it described as "draconian consequences" in circumstances where no underlying consumer law infringement had occurred. The Court also observed that it would be disproportionate to require Emma Sleep to run the risk of a potentially significant decline in its business fortunes given the concerns identified with the proposed 1:2 FVR. Emma Sleep had argued that the CMA was forcing it to abandon its approach of running regular seasonal discounts in favour of an "everyday low prices" strategy.  

Where does the judgment leave reference pricing?  

As noted above, following the judgment, the CMA has temporarily withdrawn its online mattress sale guidance. It remains to be seen if the guidance will be reinstated or if more nuanced guidance will be published following the Court’s refusal to endorse a 1:2 FVR.  

However, it is  worth noting that the High Court judgment remains largely consistent with the principle-based CTSI Guidance on Pricing Practices. The CTSI Guidance has always been clear that sales volumes at the reference price is just one of many factors that influence whether a reference price is "genuine" or not. The CTSI's approach has arguably been vindicated by the High Court decision.

On the whole, the judgment indicates that courts may favour a fact-specific assessment rather than reliance on rigid numerical thresholds. In some cases, economic evidence may be required to show how consumers respond to discounts in different sectors. Businesses should therefore continue to assess reference pricing holistically, considering factors such as pricing history, duration, sales data, commercial rationale and the expectations of the average consumer.  

What's next?

The judgment does not bring the Emma Sleep litigation to an end. While the Court declined to impose the CMA's proposed 1:2 FVR, it found that Emma Sleep had committed several admitted infringements and invited the parties to seek agreement on the terms of a revised enforcement order.

If agreement cannot be reached, further submissions will be heard in Autumn 2026.

Notwithstanding the defeat for the CMA in this case, misleading pricing practices remain a key focus in the CMA's enforcement agenda. This judgment, which was brought under the pre-Digital Markets, Competition and Consumers Act 2024 (DMCCA) regime, will no doubt give the CMA reason to reflect, but it is unlikely to dampen its enthusiasm for bringing future reference pricing cases.

It is also important to note that in DMCCA enforcement cases, the CMA has the power to impose retrospective penalties without needing to specify any formula (FVR or otherwise) governing future conduct. It will only need to determine whether the reference pricing practice in question constituted an unfair commercial practice for the purposes of Part 4 of the DMCCA.

Note: On 22 May 2026, the High Court imposed a separate order on Emma Sleep in respect of its wider promotional practices, including urgency and scarcity claims. Read our article here for more information.

If you would like to discuss how this judgment may affect your pricing practices, get in touch with TLT's consumer law team. Our team regularly advises retailers, global brands and online marketplaces on reference pricing, promotional compliance and the structuring of pricing strategies under UK consumer and advertising law.

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Contributor: Rebecca Regan

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2026.  For more information see our terms & conditions.