With Oasis Live ’25 kicking off in the next couple of weeks, the CMA has now published its update on its dynamic pricing review, which commenced following the furore around ticket sales for the tour. The outcome is positive for businesses – the CMA has confirmed that dynamic pricing can be great for consumers and is here to stay in the UK, provided it is done in the right way.
In this article we summarise the CMA’s findings and set out what businesses need to be doing to ensure they fall on the right side of the line, staying out of the CMA’s crosshairs (particularly given their new extensive consumer enforcement powers including fines of up to 10% of global turnover).
Key findings
Whilst there is no agreed definition of dynamic pricing, in this context we are talking about situations where businesses adjust prices rapidly and frequently in response to changing demand conditions, which is frequently seen in sectors such as travel and hotels, as well as live events.
Dynamic pricing can be positive for consumers and competition, but its effects depend on consumer flexibility, awareness, market competition, the ability to compare options, the impact on vulnerable groups, and whether it stimulates extra supply.
Consumer Flexibility: if consumers can adjust when or how they purchase (such as choosing different travel times), dynamic pricing can help balance demand and offer better deals. However, in situations with few alternatives (like one-off events), dynamic pricing may simply increase seller revenue without benefiting consumers.
Consumer Awareness: when consumers understand that prices change dynamically and know how and when prices might vary, they can plan better and potentially secure lower prices.
Complexity and Pressure: dynamic pricing can make it harder for consumers to compare options, especially if pricing structures are complex or if consumers feel rushed to buy before prices rise. This can hinder good decision-making, particularly if online purchase flows are designed in ways that increase confusion or pressure.
Market Competition: in competitive markets, dynamic pricing can lead to lower prices and better services for consumers, as businesses compete and use resources more efficiently. In less competitive markets, these benefits are less likely to be passed on to consumers.
Impact on Vulnerable Consumers: Dynamic pricing can disadvantage certain groups, such as those who cannot plan ahead, have lower incomes, or lack digital skills, as they may end up paying higher prices. This raises concerns for consumer and public policy.
Supply Response: In some sectors, dynamic pricing can encourage additional supply during peak demand (for example, more ride-hailing drivers during busy periods), which can benefit consumers.
Areas of greater concern
The CMA has made it clear that it is going to be more concerned when:
- Consumers do not know that dynamic pricing is in use or how it affects prices.
- Sudden price increases pressure consumers to make quick decisions.
- Vulnerable consumers end up paying higher prices.
- Dynamic pricing impacts the market more broadly, leading to higher prices, lower output, and harm to consumers, businesses and the UK economy.
Advice for businesses
Providing consumers with sufficient clear and accurate information, in order for them to make informed transactional decisions, is a fundamental tenet of consumer law. In this context, the CMA has taken the view that consumers may need to be told that prices can change, what causes these changes (such as prices rising closer to the booking date), and the possible price range, so they can decide the best time to buy. In addition, the new rules on drip pricing (see here for a more detailed update) require businesses to provide, up front, the total price the consumer will pay. Businesses therefore need to ensure that the initial advertised price is the same as the price that the consumer actually has to pay.
The CMA has published some high-level tips for businesses using dynamic pricing, which (in summary) suggest that businesses are likely to be on the right side of the compliance line if they:
- Clearly inform customers that prices can change, avoiding any impression that prices are fixed when they are not.
- Provide customers with the information they need about how and why prices may change, including when and where this information is most relevant in their buying journey.
- Present all important pricing information clearly and prominently, not hidden in small print or hard-to-find links.
- Use clear language to explain key terms, especially those that might be misunderstood, and provide examples where helpful.
- Consider the needs of vulnerable consumers and provide extra support or information to help them get the best deal.
- Avoid putting consumers under pressure to make quick decisions due to changing prices, especially if prices change rapidly or while they are waiting online.
- Do not change prices during the payment process; ensure customers know the final price before they commit to buy.
Businesses operating platforms or marketplaces through which third-parties offer products or services will need to ensure that the platform or marketplace design enables compliance with all of the above.
Comment
This whole review from the CMA was carried out in the context of significant out-cry in the context of one, highly publicised instance of dynamic pricing, which did not play out well. Taking a step back, the outcome of this CMA review is encouraging for businesses – dynamic pricing has a key role to play in a number of sectors and markets, and (as with any consumer facing practice) when deployed properly and appropriately, there is no immediate regulatory concern. As is always the case, each business does need to consider its own context, sector and relevant consumers, but broadly speaking, there is nothing revolutionary here – just helpful clarification that dynamic pricing is fine (and of real benefit to all stakeholders) if consumers are properly informed.
If you would like to discuss anything to do with dynamic pricing, or another consumer law issue, please do not hesitate to contact one of our specialists.
