The Competition and Markets Authority (CMA) has recently provided a detailed submission to the Business and Trade Select Committee, with a particular focus on pricing practices in the live events sector. Central to this submission is the CMA's update on its investigation into Ticketmaster's sale of tickets for the Oasis reunion UK tour, which has brought to light significant concerns about transparency and fairness in ticket pricing. We previously reported on this here.
Key findings
The CMA's investigation into Ticketmaster identified two main areas of concern:
- Misleading labelling of 'Platinum' tickets: Ticketmaster sold certain seated tickets as 'platinum' at nearly 2.5 times the price of equivalent standard tickets, despite these tickets offering no additional benefits and being located in the same areas as standard tickets. This practice risked misleading consumers into believing they were purchasing a superior product.
- Lack of transparency in 'Standing' ticket pricing: There were two categories of standing tickets at different prices, but this was not made clear to consumers. All cheaper standing tickets were sold first, and only after these were gone were the more expensive standing tickets released. Many fans, unaware of this structure, waited in long queues only to be faced with higher prices than expected.
The CMA did not, however, find evidence that Ticketmaster used real-time algorithmic pricing to adjust ticket prices based on demand during the Oasis sale.
What's the story? Spoiler alert, it is not morning glory
Following its investigation, the CMA sought voluntary undertakings from Ticketmaster to address the identified concerns. However, Ticketmaster declined to provide undertakings in the terms sought, leading to a fundamental disagreement over whether its practices breached consumer law. The CMA is now preparing for potential litigation, while remaining open to a voluntary resolution with Ticketmaster.
CMA's approach in other sectors
The CMA's submission also highlights its broader approach to pricing and competition across various sectors. The Authority generally seeks to improve the effectiveness of competition rather than directly regulate prices, except in cases where competition is not working or where there is evidence of anti-competitive practices such as price fixing or abuse of dominance.
Recent CMA work has included:
- Market studies: Investigations into sectors such as road fuel, infant formula, and veterinary services, where concerns about high prices and lack of transparency have prompted recommendations for improved competition and clearer information for consumers.
- Consumer protection enforcement: Action against practices like 'drip pricing' (where fees are hidden until late in the purchase process), misleading price claims, and lack of price transparency in sectors ranging from groceries to car rentals and online hotel bookings.
- Dynamic pricing: The CMA has been examining the use of dynamic pricing across sectors, recognising that while it can sometimes benefit consumers, it can also lead to unfair outcomes if not properly explained or managed.
Takeaways
- Transparency, transparency, transparency: You'll be sick of hearing it, but businesses must ensure that all pricing information is clear, accurate, and provided upfront. Misleading labelling or hidden pricing structures can lead to regulatory scrutiny and damage consumer trust.
- Dynamic and personalised pricing: If using these models, businesses should be transparent (there's that word again) about how prices are set and ensure consumers understand the basis for any price differences.
- Compliance with consumer law: The CMA is becoming increasingly proactive in enforcing consumer protection legislation, particularly with its new powers under the Digital Markets, Competition and Consumers Act 2024.
- Monitor regulatory developments: The CMA's focus on pricing practices across sectors means businesses should keep abreast of guidance and enforcement trends to ensure ongoing compliance. We are still awaiting the outcome of the Emma Mattress case on reference pricing, so watch this space.
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