The High Court judgment in the long-awaited consumer law case Competition and Markets Authority ("CMA") versus Emma Matratzen GmbH and others ("Emma Sleep") has been handed down, and it's not the wake-up call the CMA was hoping for.

Bedtime story... are you sitting comfortably?

Here is the backstory, for anyone who hasn't been following this important case carefully. 

The case has its roots in the CMA's wider investigation into the online mattress market, which examined issues including online choice architecture (such as countdown timers and pressure selling tactics) and pricing practices. Emma Sleep sold thousands of mattresses for what they claimed were knock-down prices. They used claims such as "Was £X, NOW £Y." The trouble was they only sold a small number at the higher price, and they sold hundreds (or thousands) at the lower price. So, the CMA was concerned that the 'Was' price was not a genuine usual price, so claims such as "Was £X, Now £Y" were inherently misleading (even if those mattresses had technically been available to buy at the higher price.... not many people bought them at those higher prices).  

The CMA launched an investigation into Emma Sleep and Simba Sleep. 

In August 2024, Simba Sleep settled its differences with the CMA by agreeing to undertakings, including commitments that:

This meant the case into Simba Sleep was closed.

But Emma Sleep refused to settle with the CMA.... why?

Emma Sleep did resolve the CMA's concerns about its "urgency messaging" in a consent order dated 22 May 2026. They agreed not to use misleading countdown clocks. But this left the dispute on reference pricing, i.e. those claims of "Was £X, NOW £Y." 

The reason it dragged on was because the CMA tried to introduce a new test, setting a much higher bar than we had ever seen in the UK before for reference claims (and higher than you will see in virtually any other country)!

The CMA's position, set out in its mattress sector guidance published in 2024, was that for a reference price to be genuine, the product must not only have been sold at the higher price for a sufficient duration of time (i.e. at least as long as the was/now offer is applied), but it must also be sold in sufficient volume, and those sales must have been made in the same way (e.g., on the same website) immediately before the discount began.

It is with this new, more stringent volume requirement that the CMA set that high bar. The ASA had always made clear that the higher price had to apply in practice to some extent - i.e., the seller had to have sold some of the product at the higher price. Ideally, a 'significant number'. Nobody probed too carefully into what that meant, and the world merrily continued to spin on its axis, and all was well.

But then, controversially, the CMA introduced a 1:2 ratio for discount claims. This meant that, for example, if 100 units are sold at the higher price, no more than around 200 should be sold at the discounted price - otherwise the "was" claim must be withdrawn. The rationale being that the higher price stops being the genuine usual selling price of the product at that point, and instead the lower 'now' price becomes the new genuine usual selling price. This ratio was brand new, and simply didn't apply in the UK before the CMA made it up in these cases against Simba and Emma Sleep. 

It was set to cause all manner of practical issues for sellers, not least the confusion that would have arisen from fixed sale periods in stores (e.g., January sales, summer sales, Black Friday, etc), and the need for sellers to keep a very detailed contemporaneous record of sales data across all stores and to act pretty much immediately on a daily basis to edit their discount claims, whether they sell dozens, thousands, or hundreds of thousands of products, across one store or hundreds, and whether their price tags are digital or paper based... it was the stuff of nightmares.  And some (including Geraint...) would argue, completely unnecessary.

Back to the main protagonist of this fever dream... Emma Sleep.

Even though Emma Sleep had only sold around 1% of its mattresses at the higher price, Emma Sleep refused to sign an undertaking to comply with the 1:2 ratio, prompting the CMA to pursue legal action. 

Side note: As the claim was begun nearly two years ago, it was brought using the CMA's pre-April 2025 enforcement powers, not under the DMCC Act, with the CMA seeking a court order mirroring the undertakings it had asked Emma Sleep to agree to voluntarily.

Rise and shine: the judgment

Finally, the Emma Sleep trial was held in the High Court at the beginning of June 2026 and the court handed down its judgment on 30 July 2026. Emma Sleep admitted several specific and narrow breaches:

1. using a struck-through reference price for a new product never actually offered at that price;
2. using a reference price that was not the price charged immediately before the promotion;
3. using a reference price while a lower bundled price was simultaneously available; and
4. insufficient sales volumes at a reference price in specific instances where less than 1% of relevant sales were made at the higher price.

However, the judge rejected the CMA's broader case that a low proportion of sales at the reference price is, of itself, sufficient to establish that Emma's reference pricing was generally misleading. Central to this conclusion was the relevance of Emma's subjective belief in whether a reference price was realistic – a factor the CMA had expressly declined to rely on. The judge, however, found the average consumer would consider this material, drawing support from ASA and CTSI guidance and, by analogy, with Office of Fair Trading v The Officers Club Ltd [2005] EWHC 1080 (Ch). 

The judge did find that Emma Sleep's admitted breaches caused or were likely to have caused average consumers to take transactional decisions they would not otherwise have taken, and that they harmed the collective interests of consumers, satisfying the statutory preconditions for an enforcement order.

Is the CMA's 1:2 volume ratio... toast?

Although the preconditions for an enforcement order were met, the court declined to make the order sought by the CMA based on a 1:2 volume ratio. The reasons included:

• the specific breaches that the 1:2 volume ratio was seeking to address involved very different metrics, for example, around 1:50,000 for one product line. The Court therefore considered that a uniform 1:2 threshold risked "drawing the line in the wrong place";
• because subjective belief and other contextual factors can mean that even a very low volume ratio does not amount to a breach, imposing a blanket 1:2 volume ratio risks penalising conduct that would not be an infringement. This matters all the more given that a breach of an enforcement order under the Digital Markets Competition and Consumers Act 2024 could expose Emma to turnover-based fines and criminal penalties; and
• there was a risk (though not a proven causal finding) that Emma's move toward a 1:2 ratio in early 2025 contributed to its significant revenue decline, reinforcing proportionality concerns.

What's next: setting the alarm for round two

Although the court rejected the terms of the enforcement order the CMA was seeking, it did not adopt any specific alternative. Instead, the judge invited the parties to seek to agree the terms of an enforcement order consistent with the judgment's conclusions, with any dispute to be resolved at a further hearing on consequential matters in the autumn... when the courts are back in session after a restful summer break.

Given the length of the dispute between the parties and how far apart the judgment reveals them to have been (Emma proposed a 1:19 ratio), it remains to be seen whether they can now agree a way forward or whether they will be back in court before Christmas.

Practical takeaways: sleep with one eye open

• The headline lesson from Emma Sleep (so far) is that a neat mathematical ratio may have been simple for the CMA to apply, but it came at the expense of taking all the facts of a particular case into account – and the High Court was not prepared to let the CMA trade one for the other.
• The CMA has now withdrawn its online mattress guidance, where the 1:2 volume ratio requirement was set out.
• Given the court's scepticism of the appropriateness of a one-size-fits-all ratio, it may be unlikely that a similar mechanism is either agreed by the parties or ultimately ordered by the court in due course. This is one to watch for business.
• The judgment reinforces the importance of the broader guidance, such as the CTSI's Guidance for Traders on Pricing Practices and ASA guidance on reference pricing. This can still inform the court's assessment of consumer perception, even though it does not bind the court.
• Whilst this case is technically resolved, the CMA remains unlikely to pursue reference pricing cases focusing on a volume requirement for the time being. However, businesses should not become complacent about the more established compliance requirements around the duration of the reference price. This requires that the reference price must be offered for a sufficient period of time immediately before the discount begins. And there is still a broad volume requirement applied by the ASA... but articulating that has become even harder!

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