Key Highlights
- The Competition and Markets Authority (CMA) has launched investigations into eight companies over potential violations of online pricing practices.
- The CMA is also writing to 100 businesses about their use of additional fees and sales tactics, as part of a broader review under new consumer protection powers.
- Companies being investigated include StubHub, Viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Wayfair, Appliances Direct, and Marks Electrical.
- The CMA has expanded its regulatory powers with the Digital Markets, Competition and Consumers Act introduced last year, allowing it to fine companies up to 10% of global turnover for breaking consumer laws.
Background on Online Pricing Practices and Consumer Protection
The Competition and Markets Authority (CMA) has taken a significant step in ensuring online pricing practices remain transparent and fair, launching investigations into eight companies under its new expanded powers. This move comes as part of a broader review that began since April, examining more than 400 businesses to determine if their price transparency policies meet regulatory standards.
New Powers and Scope
The Digital Markets, Competition and Consumers Act, introduced last year, has granted the CMA extensive new capabilities. These include the authority to investigate potential breaches of consumer protection laws directly, without needing to go through the court system. The CMA can now order companies to pay compensation to affected customers and impose fines reaching up to 10% of a company’s global turnover.
Companies Under Investigation
The CMA’s investigations cover several sectors, including ticket resellers (StubHub and Viagogo), driving schools (AA Driving School and BSM Driving School), fitness centers (Gold’s Gym), homeware retailers (Wayfair), and electrical appliance providers (Marks Electrical). Additionally, Appliances Direct is facing scrutiny for both mandatory additional charges and automatic opt-ins.
Concerns Addressed
The CMA’s concerns span a range of practices such as drip pricing—where consumers are shown an initial price only to discover additional fees later in the checkout process. Other issues include mandatory additional charges, misleading countdown clocks, and time-limited sales that do not end when advertised.
Industry Response
In response to these investigations, AA Driving School and BSM Driving School have maintained their transparency measures, stating they are already in line with CMA guidelines. The spokespersons for both companies emphasized their commitment to notifying customers earlier in the purchasing process, which they claim they have already implemented.
Broader Context
This investigation is part of a wider effort by the CMA to protect consumers from misleading online pricing practices. With more and more transactions moving online, ensuring that prices are clear and transparent has become increasingly important. The CMA’s actions reflect the growing need for robust consumer protection measures in the digital age.
Conclusion
The Competition and Markets Authority’s move signals a stronger stance against unfair business practices online. As consumers continue to rely heavily on the internet for purchasing goods and services, ensuring that their experience remains fair and transparent is crucial. The CMA’s expanded powers will likely set a precedent for future regulatory actions in this space.
