Dynamic Pricing under scrutiny: don’t look back in anger
In September 2024, tickets for the highly anticipated Oasis reunion tour were released. However, many fans were left disappointed and frustrated when, after hours of waiting in virtual queues, they discovered that ticket prices had surged beyond the advertised rates due to "dynamic pricing." This article outlines recent regulatory and governmental efforts to address ticket pricing practices, including dynamic pricing.
What is dynamic pricing?
Dynamic pricing is a strategy that businesses use to rapidly adjust prices to reflect changing market conditions, such as increases in demand. While the use of dynamic pricing in the live events sector has gained public attention through the Oasis ticket controversy, it is a strategy widely used by businesses that has become an everyday practice (often without consumers even realising it). For instance:
- Ride-hailing services may raise fares during periods of high demand, such as on rainy days.
- Flights become more expensive during holiday periods.
- Hotels increase prices during major events or holiday periods.
Existing consumer protections
Under existing consumer law, businesses including ticket sellers must ensure consumers receive essential information to make informed decisions. Accordingly, ticket sellers must disclose the total price upfront, including any additional charges such as booking or service fees.
The Digital Markets, Competition and Consumers Act 2024 (DMCCA) is aimed at restating and strengthening the existing protections afforded to consumers. Coming into effect in phases from April 2025, the DMCCA (i) provides the CMA with increased powers to enforce consumer laws directly if the CMA considers that these have been breached, and to fine traders for such infringement;[1] and (ii) enables the public designated enforcers (which includes the CMA and other regulatory bodies) to apply to the court for an enforcement order.[2]
CMA and government actions
Since the Oasis Controversy, the CMA and the UK Government have launched a number of investigations and projects to determine whether there has been a breach of existing consumer law through the use of pricing practices such as dynamic pricing, the impact of current and emerging pricing practices on consumers, and whether the existing legal framework provides adequate protection for consumers.
The Ticketmaster investigation
On 5 September 2024, the CMA launched an investigation into Ticketmaster’s use of dynamic pricing during the Oasis ticket sales. The investigation focuses on whether Ticketmaster breached consumer protection laws by:
- Engaging in unfair commercial practices prohibited under the Consumer Protection from Unfair Trading Regulations 2008.
- Failing to provide clear and timely information about dynamic pricing and how it operates.
- Pressuring consumers to make quick purchasing decisions at higher-than-expected prices.
The investigation is currently in its initial evidence-gathering stage and the CMA has noted that they are keeping all options open, including potential enforcement action if there is evidence of possible breaches of consumer protection law (see page 2 of the Letter to the Government from the CMA).
CMA’s broader project on dynamic pricing
On 13 November 2024, the CMA initiated a broader project to examine the use of dynamic pricing across different sectors and to explore any broader competition and consumer issues raised by dynamic pricing, including in the travel and leisure industries.[3] This project aims to:
- Identify scenarios where dynamic pricing is employed.
- Assess its commercial and consumer benefits.
- Evaluate potential challenges to competition and consumer fairness.
The CMA has noted that the project is not a formal investigation and is intended to inform the Government’s call for evidence on price transparency in the live events sector.
Government’s call for evidence on pricing practices in the live events sector
On 10 January 2025, the Government issued a call for evidence on pricing practices, including dynamic pricing, in the live events sector.[4] The focus is on understanding:
- How ticket pricing operates.
- The impact of current practices on consumers.
- The new risks or harms posed by emerging practices.
- Whether the existing consumer framework adequately ensures fairness and transparency.
The call for evidence notes that dynamic pricing can have a particular impact on ticket sales due to the limited supply of tickets, demand and the limited windows in which tickets are sold.[5] The call for evidence therefore seeks consumer opinions into their experience, with the objective of balancing consumer protection, access to live events for fans, and the economic success and sustainability of the live events sector.
Additional legislative developments
In late 2024, the Sale of Tickets (Sporting and Cultural Events) Bill was introduced in Parliament. The Bill seeks to require ticket-selling platforms to display the full range of available tickets, their quantities, and prices to consumers in online queues. The bill proposes that non-compliance could result in significant fines. The second reading for the bill is expected to take place on 4 July 2025.[6]
Comments
With the DMCCA set to bolster consumer protections and expand the CMA’s enforcement powers, the findings of ongoing investigations and projects could significantly influence pricing practices across industries beyond event ticket pricing. For example, online platforms with significant influence in the market might face closer examination if dynamic pricing leads to unusually high prices, which could be seen as exploiting their dominant position under competition law. It remains to be seen how far they can go tackling high seasonal prices for hotels and flights however, given the typically larger number of market players.
Footnotes
[1] DMCCA, Chapter 4.
[2] DMCCA, Chapter 3.
[3] Dynamic pricing project - GOV.UK
[4] Putting fans first: call for evidence on pricing practices in the live events sector - GOV.UK
[5] UK Government’s call for evidence on pricing practices in the live events sector, 10 January 2025, at page 4.
[6] Sale of Tickets (Sporting and Cultural Events) Bill Stages - Parliamentary Bills - UK Parliament