Eight companies are being formally investigated by the UK’s Competition and Markets Authority (CMA) over concerns about online pricing tactics. This is the regulator’s first major enforcement action under its enhanced consumer protection powers.
The firms – StubHub, Viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Wayfair, Appliances Direct and Marks Electrical – are being examined as part of a comprehensive review of how companies display and structure online prices. The CMA is also writing to a further 100 companies to warn them of potential breaches relating to additional fees, pressure sales and misleading sales tactics.
CMA chief executive Sarah Cardell said consumers should be able to trust that the prices they see online are genuine and complete.
“At a time when household budgets are under constant pressure and we are all looking for the best deal possible, it is vital that people can shop online with confidence, knowing that the price they see is the price they will pay,” she said. “All sales must be genuine.”
The investigations follow a comprehensive review launched in April in which the CMA assessed price transparency practices at more than 400 companies across the economy. Regulators are particularly concerned about “drip pricing,” in which customers are shown a low initial price but additional fees are only applied at checkout, as well as the use of countdown clocks and other pressure-based sales tactics.
The cases are the first to be opened under the Digital Markets, Competition and Consumers Act introduced last year, which gives the CMA unprecedented enforcement powers. The regulator can now determine for itself whether consumer law has been violated – without taking the case to court – and can order companies to pay damages or impose fines of up to 10% of global turnover.
The CMA has not yet confirmed a timeline for the investigation but said further enforcement action was likely as the regulator continued its industry-wide review. The companies named have the right to respond and the CMA has not yet determined whether any breaches have occurred.
