Britain’s competition watchdog has begun investigations into eight companies about their online pricing practices, expressing concern over additional fees and sales tactics such as “drip pricing” and “pressure selling”.
The Competition and Markets Authority (CMA) said it was looking into the ticket sellers StubHub and Viagogo; AA Driving School and BSM Driving School; the US gym chain Gold’s Gym; and the retailers Wayfair, Appliances Direct and Marks Electrical.
The investigations are the first launched by the CMA using its new consumer protection powers. The watchdog said it had concerns over practices including drip pricing – when consumers are shown an initial price and then face additional fees in the checkout process – and the use of misleading countdown timers, which are banned under the new regime.
The investigations follow a cross-economy review by the CMA since April of more than 400 businesses in 19 sectors to assess their compliance with price transparency rules.
The watchdog has also written advisory letters to 100 businesses across 14 sectors outlining concerns about their use of additional fees and sales tactics. It is publishing new guidance for businesses to help them comply with the law.
The regulator’s new powers enable it to decide whether consumer laws have been broken, rather than having to go through the courts. If the CMA finds there has been an infringement of the law, it can order businesses to pay compensation to affected customers, and can fine companies up to 10% of global turnover.
“It’s crucial that people are able to shop online with confidence, knowing that the price they see is the price they’ll pay, and any sales are genuine,” said the CMA chief executive, Sarah Cardell.
“Whether you’re spending your hard-earned cash on concert tickets or driving lessons, joining a gym or buying furniture and appliances for your home, you deserve a fair deal. It’s our job to protect consumers from misleading prices and illegal pressure selling and today marks an important milestone.”
The secondary ticketing sites StubHub and Viagogo are under review over the mandatory additional charges applied when consumers buy tickets, and whether or not these fees are included upfront.
The AA Driving School and BSM Driving School are being investigated over whether their mandatory fees are included in the total price the consumer sees at the beginning of the purchase process.
Gold’s Gym is under investigation over not including its one-off joining fee for its annual membership in advertised membership costs.
The homeware retailers Wayfair, Appliances Direct and Marks Electrical are being investigated to determine whether their time-limited sales ended when they said they would, or whether customers were being automatically opted in to purchase additional services.
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Rocio Concha, the director of policy and advocacy at the consumer group Which?, which says it has consistently exposed “dodgy business practices”, said: “It’s encouraging that the regulator is taking this action. It shouldn’t hesitate to use its new consumer enforcement powers to fine any firms that have broken the rules.
“This action underlines the value of effective regulation in ensuring unscrupulous firms don’t get unfair advantages over companies that comply with the law.”
The investigation piles further pressure on Viagogo and StubHub. The latter company’s shares fell nearly 14% on Monday after the Guardian revealed that reselling tickets for profit is to be outlawed, as the government goes ahead with a long-awaited crackdown on touts and resale platforms.
AA Driving School said: “We are comfortable that the £3 booking fee for lessons is already transparent and in line with the CMA’s rules.”
Viagogo said: “We have continually engaged constructively with the CMA and will be fully cooperating with their investigation.”
The other companies were contacted for comment.
