The Competition and Markets Authority (CMA) has announced it is investigating Ticketmaster, the US-based ticket sales and distribution company, for potential breaches of consumer law, including in respect of its use of "dynamic pricing" practices to sell tickets for Oasis' upcoming reunion tour.
Ticketmaster's "dynamic pricing" model
The investigation will focus on whether Ticketmaster's "dynamic pricing" model is in breach of consumer protection law. The "dynamic pricing" model is a ticket pricing system that changes the price of tickets based on demand. Ticketmaster states that this model is used to stop ticket touts and give more money to artists. However, fans were left waiting for hours in online queues before unexpectedly being faced with ticket prices that, in some cases, were £200 above the original marketed ticket value.
As part of its investigation, the CMA will consider:
- whether Ticketmaster engaged in unfair commercial practices;
- whether people were given clear and timely information to explain that the tickets could be subject to so-called "dynamic pricing" with prices changing depending on demand; and
- whether people were put under pressure to buy tickets within a short period of time – at a higher price than originally advertised, potentially impacting their purchasing decisions.
The investigation is in its infancy and the CMA is currently gathering evidence of potential consumer law non-compliance. The CMA is inviting fans to share their experiences in relation to the purchase or attempted purchase of Oasis tickets.
The CMA will investigate Ticketmaster using its current powers and existing consumer laws, focusing on the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). Under the CPRs, "dynamic pricing" is not categorised as a "banned unfair practice" (schedule 1, CPRs). Instead, the CMA will examine whether Ticketmaster's use of "dynamic pricing" constituted an "unfair commercial practice", which includes providing false information, omitting material information, and using aggressive sales tactics (r. 5, 6 and 7, CPRs).
The Digital Markets, Competition and Consumers Act 2024 (DMCCA) will introduce a new consumer protection regime, which is expected to come into force April 2025. The DMCCA will revoke the CPRs and incorporate its provisions into the DMCCA. Most provisions from the CPRs, including the test for unfair commercial practices, will remain broadly similar and "dynamic pricing" will continue not to be categorised as a "banned unfair practice". "Dynamic pricing" will therefore be examined in largely the same way as under the existing CPRs. The more substantial change under the DMCCA however is the introduction of a new consumer law enforcement regime. Under the DMCCA, the CMA will be able to directly enforce consumer protection laws and to fine businesses in breach of consumer law up to 10% of their global turnover.
Increasing scrutiny of ticket resellers
Unfair marketing practices in the ticket reseller space have been a focus of the CMA for several years. Between 2017 and 2021, the CMA investigated major ticket resellers viagogo and StubHub. One of the most significant consumer claims against these ticket resellers was the sale of invalid tickets, whereby consumers who purchased such tickets were subsequently refused access to the event on the grounds that their ticket was invalid. Consumers also claimed that StubHub and viagogo provided misleading information regarding the availability and authenticity of tickets, including using hidden additional fees and charges and misleading uses of urgency tactics that pressured consumers into making quick purchasing decisions. The CMA issued enforcement notices to both ticket resellers, outlining measures to be undertaken to restore consumer trust, including removing any misleading information on ticket pricing and ensuring customers are informed if their tickets might result in being denied entry.
Practical points
Macfarlanes has advised clients on a number of recent CMA investigations into consumer-facing businesses. The CMA is demonstrating in the Ticketmaster investigation, and others to date, that it intends to be proactive in investigating ticketing and other practices it suspects are misleading to consumers. Consumer-facing businesses should evaluate their ticket selling practices to ensure they comply with existing consumer law and future consumer law under the new DMCCA. This is particularly important in light of the CMA's incoming enhanced powers, which are expected to put public enforcement of consumer law on a par with that of competition law.
For businesses using "dynamic pricing" models, careful planning and transparency are crucial. To ensure compliance, such businesses should consider implementing the following mechanisms:
- transparent communication: clearly inform consumers that ticket prices may change based on demand and provide a breakdown of how prices are determined;
- decision time: give consumers ample time to decide on accepting increased prices, rather than surprising them with inflated prices at checkout with limited time to purchase; and
- monitoring and review: conduct regular audits of the "dynamic pricing" system to ensure it complies with consumer protection laws, and encourage and review consumer feedback regarding such pricing practices, to maintain trust with consumers.
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