CMA Mandates Refunds and Penalty for Ticket Reseller
Ticket resale platform StubHub UK is set to issue refunds to more than 50,000 customers and has incurred a £900,000 fine due to its practice of not presenting the complete ticket price at the initial stage of purchase. This action comes after an investigation by the Competition and Markets Authority (CMA), which found that the company engaged in illegal hidden fee practices.
Customers impacted by these practices are anticipated to receive an average of £10 per transaction. Emma Cochrane, executive director of consumer protection at the CMA, emphasized the illegality of hidden fees, stating that it is unfair to attract customers with seemingly good deals only for them to discover higher prices at checkout due to unavoidable additional charges.
Investigation into Drip Pricing
The CMA's enforcement against StubHub UK is part of a broader review into online pricing strategies, specifically targeting 'drip pricing,' a practice that was outlawed last year. Drip pricing involves introducing fees and charges later in the buying process, creating the illusion of a lower initial cost for the consumer.
Between April 6 and December 7 of last year, the CMA identified instances where StubHub UK required customers purchasing tickets for concerts and sporting events to pay mandatory costs, such as delivery and service fees, which were only added at the final checkout stage despite being unavoidable. StubHub UK has acknowledged its breach of the law and received a 40% reduction in its penalty as a result. The company has also committed to ceasing the problematic conduct.
Wider Regulatory Action and New Powers
This penalty for StubHub UK coincides with ongoing CMA investigations into several other firms regarding their online pricing and selling practices. These investigations cover issues such as pressure selling, misleading countdown clocks, and drip pricing. The Digital Markets, Competition and Consumers Act, enacted last year, grants the CMA enhanced powers to combat anti-competitive behavior. The authority can now directly determine if consumer laws have been violated, order compensation for affected customers, and impose fines up to 10% of a company's global turnover without needing to go through the courts.
The CMA also provided an update on its ongoing investigation into Viagogo concerning its fee presentation, with further details expected later this summer. Earlier in March, the CMA compelled the owners of AA and BSM driving schools to refund over 80,000 learner drivers for similar failures to disclose total lesson prices upfront during online bookings.
Rocio Concha, policy director at consumer group Which?, commented on the regulator's actions, calling them a strong warning. She reiterated that the law is clear regarding hidden fees and praised the CMA for utilizing its new powers to secure refunds for consumers and impose significant fines.
Source: Ticket reseller StubHub UK customers to get refunds over illegal hidden fees