Eight firms under investigation over online pricing

Eight firms, including ticket resellers and driving schools, are being investigated by the UK government's competition watchdog as part of a probe into online pricing practices.

These are the first cases brought by the Competition and Markets Authority (CMA) under new consumer protection legislation. The authority is examining practices such as mandatory additional fees, time-limited sales, and automatic 'opt-ins'.

The businesses under investigation are StubHub, Viagogo, AA Driving School, BSM Driving School, Gold's Gym, Wayfair, Appliances Direct, and Marks Electrical. The CMA is also writing to 100 other companies to inform them of its concerns regarding their use of additional fees and marketing tactics.

'At a time when household budgets are under constant strain and we're all searching for the best bargain possible, it's vital that people shop online with confidence, knowing that the price they see is the price they'll pay and that any sales are legitimate,' said CMA chief executive Sarah Cardell.

The announcement follows a massive review, ongoing since April, which looked at more than 400 companies across the country to check compliance with price transparency laws.

Under the Digital Markets, Competition and Consumer Act introduced last year, the CMA has the ability to combat anti-competitive behaviour directly. It can now determine if consumer rights have been broken without having to go through the courts. It has the power to order companies to compensate affected customers and fine firms up to 10% of their global turnover.

As part of its probes, the CMA reported that it is investigating techniques such as 'pressure selling', misleading countdown clocks, and 'drip pricing'. Drip pricing occurs when consumers are shown an initial price for an item or service, only to find additional charges revealed later in the checkout process.

Updates on the probes are set to be published next month.

Rocio Concha, director of policy and advocacy for the consumer group Which?, said it was 'encouraging' that the regulator is taking this action.

'It should not hesitate to use its latest consumer protection tools to discipline any businesses that have breached the rules,' she said.

The 100 companies contacted by the CMA cover sectors including holidays, homeware, rail and bus travel, parking, luggage storage, film rental, food delivery, fitness, fashion, and online vouchers. These businesses have been put 'on notice' and are expected to comply with pricing guidance to avoid enforcement action.

The CMA noted that it had reached 'no conclusions about whether the law has been broken' in any of these investigations.

Company Responses

Automobile Association Developments Limited, which runs AA Driving School and BSM Driving School, defended its pricing. A spokesperson said: 'We are confident that the £3 booking fee for lessons is completely transparent and in accordance with the CMA's legislation, and we are more than willing to notify customers earlier in the journey as well, which we have already done.'

A spokesperson for Viagogo said: 'We have continually collaborated constructively with the CMA and will be fully cooperating with their probe.'

Marks Electrical said it was 'fully committed to full compliance with all applicable consumer and competition legislation' and that it would cooperate with the probe.

'Our checkout has attempted to provide these services with concise descriptions, straightforward pricing, and a simple one-click option to delete them,' the company said. 'Product prices and service costs are shown separately and prominently, ensuring that customers can make informed decisions before making their purchase.'

StubHub, Gold's Gym, Wayfair, and Appliances Direct have been contacted by the BBC for comment.