UK CMA launches investigation into Ticketmaster's Oasis ticket sale

Many Oasis fans will undoubtedly be looking back in anger, having missed the chance to bag tickets to the band's upcoming reunion. On 5 September, the Competition and Markets Authority (CMA) launched an investigation into Ticketmaster, the ticket sales and distribution group, including the use of "dynamic pricing" that some fans felt had led to them paying higher prices than they otherwise would have.

What is 'dynamic pricing'?

Dynamic pricing is a mechanism whereby the price of an item or service (in this case, Oasis tickets) fluctuates in response to real-time demand from the market. When demand is high, prices are likely to increase as more consumers compete for a limited number of tickets. Conversely, when demand is low, prices are likely to decrease as the availability of tickets exceeds the number of consumers wanting to buy them.

Dynamic pricing is not automatically unlawful in the UK, but the practice must not mislead consumers and must be carried out transparently. Therefore, if not carefully implemented, dynamic pricing could lead to breaches of advertising law, consumer protection law and competition law.

Ticket price surge

To acquire tickets to the reunion, Oasis fans had to join a lengthy online queue. Many fans reported paying significantly higher prices than they expected. Tickets were advertised as starting at around £150. However, by the time fans had waited (sometimes for hours) in the online queue and finally arrived at the checkout, the price of their tickets had increased considerably, in some cases by around £200 more than the advertised price. Ultimately, this was due to the surge in demand for tickets and the flexibility of the dynamic pricing system.

Consumer protection law

The Consumer Protection from Unfair Trading Regulations 2008/1277 contains several protections for consumers. Broadly, the Consumer Protection Regulations prohibit "unfair commercial practices". Under the Consumer Protection Regulations, a commercial practice is unfair if it is:

• not professionally diligent and it materially distorts (or is likely to materially distort) the economic behaviour of the average consumer;
• a misleading action, that is, an action which misleads consumers in relation to certain matters set out in the regulation (one of which is the price or the manner in which the price is calculated), causing (or likely to cause) the consumer to make a purchase they would not otherwise have made;
• a misleading omission, that is, hiding material information or providing material information in a manner which is unclear, unintelligible, ambiguous or untimely; and/or
• listed in schedule one of the Consumer Protection Regulations. For example, schedule one prohibits traders from making an invitations for consumers to purchase products at a specified price without disclosing the existence of any reasonable grounds the trader may have for believing that they will not be able to offer the products at that price (that is, potentially the fact that the price is subject to change).

UK advertising law

The UK Advertising Standards Authority (ASA) is also active in this area from an advertising perspective. The ASA's guidance states that, where marketers use dynamic pricing, it is their own responsibility to ensure that price statements are accurate to ensure that consumers are not misled.

For example, the ASA has previously upheld complaints in relation to ads which stated the price of a product where that price was not available due to the use of dynamic pricing (which was not made clear in the ad).

The CMA's investigation

The CMA is using its consumer law powers to investigate whether:

• Ticketmaster has engaged in unfair commercial practices prohibited by the Consumer Protection Regulations.
• People were given clear and timely information to explain that tickets could be subject to dynamic pricing, with prices changing depending on demand and the price they would pay for any tickets purchased.
• People were put under pressure to buy tickets within a short period of time and at a higher price than they understood they would have to pay, potentially impacting their purchasing decisions.

The CMA is at a very early stage of its investigation and it should not be presumed that Ticketmaster has breached applicable consumer law or competition law.

Broader competition concerns

While the CMA is using its consumer law powers to investigate potentially unfair practices, it has also indicated broader concerns relating to the secondary ticketing market as a whole. The secondary ticketing market is already under government scrutiny, and the CMA has stated that it will assist the government should it seek to develop policy relating to dynamic pricing in this area.

There has been criticism in the press relating to the shared ownership of the three companies that were "approved sellers" of Oasis tickets and the lack of competition between sellers. Chapter two of the Competition Act 1998 prohibits companies from abusing dominant market positions. If the CMA considers that there is a lack of competition in the ticketing market and consumers are suffering harm, it may investigate whether a potential abuse of dominance has occurred contrary to chapter two of the Competition Act 1998.

The CMA also has extensive market study and investigation powers under the Enterprise Act 2002, which may be deployed where the CMA considers that a factor, or combination of factors, is having (or likely to have) an adverse impact on competition in markets to the detriment of consumers.

Osborne Clarke comment

Looking ahead, we may see the CMA launch competition law investigations into the ticketing market, particularly if the market becomes highly concentrated with a small number of players, offering little choice for consumers.

At present, while the CMA has the power to investigate transgressions of UK consumer law, it does not have the power to impose fines on companies acting in breach of the law. However, the much-anticipated Digital Markets, Competition and Consumers Act 2024 (DMCCA) will upgrade the CMA's consumer law powers to bring them in line with its current competition law enforcement powers. This means that, once the DMCCA is in force, companies breaching UK consumer law could face fines of up to 10% of their global turnover.

Going forward, we are likely to see the CMA become more flexible as it utilises a more extensive toolbox of enforcement powers, both under consumer law and competition law.

This Insight was produced with the assistance of James Lister, a Solicitor Apprentice at Osborne Clarke.