What is Dynamic Pricing?
Dynamic pricing is what drives the price of a ticket or goods up or down based on demand. Its use has been the subject of increased scrutiny recently. From a consumer and market perspective, having a price which can rise or fall based on demand makes sense. However, when goods or tickets become too popular, this can lead to excessive pricing which might harm the consumer.
Dynamic pricing grabbed the public’s attention last year when the Competition and Markets Authority (the CMA) started an investigation into Ticketmaster’s sale of tickets for the long-awaited Oasis reunion.
Dynamic pricing is commonplace in travel and hospitality, and most of us will be familiar with the ever-changing price of hotels and plane tickets. But the recent headlines surrounding its use in music events and for sporting events has given rise to shouts from the sidelines for dynamic pricing to be hauled back to the metaphorical bench, or in some cases, shown the metaphorical red card.
Is Dynamic Pricing Illegal?
Dynamic pricing, on the face of it, is not illegal. However, dynamic pricing can fall foul of consumer protection legislation where:
- pricing is not transparent;
- consumers are misled, either by omission or by hiding information; and
- it amounts to pressure selling, depriving consumers of the time and opportunity to make a considered decision.
From a competition law perspective, dynamic pricing may constitute an anti-competitive agreement if used to facilitate price fixing, or other anti-competitive coordination between competing undertakings.
Further, dynamic pricing may constitute an abuse of a dominant position, where a business with substantial market power uses dynamic pricing in an abusive fashion to impose excessively high prices. Excessive prices are those that are: a) unfair; and b) excessive, either relative to the market or in and of itself.
CMA Investigation
Following the furore surrounding the suspected use of dynamic pricing in the sale of Oasis’ reunion tickets, the CMA announced an investigation into Ticketmaster’s pricing practices. The Advertising Standards Authority (“ASA”) received over 450 complaints in relation to the pricing of these tickets and have decided to join the CMA’s investigation.
The CMA has just completed its initial stage of the investigation. Although there was no evidence of Ticketmaster using dynamic pricing, the CMA found that there were still concerns regarding the lack of information given to consumers by Ticketmaster.
On 25 March 2025, the CMA issued a ‘consultation letter’ to Ticketmaster setting out its concerns:
- customers were not given clear information about the fact that there were two categories of standing tickets, with all of the cheaper tickets being sold first and then the more expensive tickets being sold to customers further along in the queue; and
- some tickets were marketed as ‘platinum’ tickets and sold for more than double the price of standard tickets, but customers were not told that in fact they did not offer any additional benefits.
The CMA has asked Ticketmaster to improve the information that it provides to customers and is also looking at whether Ticketmaster engaged in unfair commercial practices prohibited under the Consumer Protection from Unfair Trading Regulations 2008; and at how different dynamic pricing models are being used in other sectors, including “algorithmic” models that adjust prices in real time.
This is a timely, and politically sensitive topic. The CMA’s investigation coincided with the CMA’s response to a letter from the Secretaries of State at the Department for Business and Trade and Department for Culture, Media and Sport on the issues surrounding live event ticket sales. In response, the CMA emphasised its view that more protections are needed for consumers buying tickets on the secondary market, which are often resold at significantly higher prices than the original ticket.
Sellers Beware
The government has identified the issue of dynamic pricing as one to focus on as part of its broader consultation on ticketing.
Notably, the government’s public consultation on the resale of live events tickets began on 10 January 2025 and closed for responses on 4 April 2025. It is evident that ticket pricing, including the use of dynamic pricing is hot on this government’s agenda and we would expect to see new consumer protection rules implemented on re-sales. Whilst dynamic pricing will likely not be the focus of the output of this specific consultation, the CMA and the government have clearly set out an intention to provide further consumer protection for ticket sales.
The government has also announced that the consumer protection elements of the Digital Markets, Competition and Consumers Act 2024 will be implemented in April 2025, with the provisions relating to subscription contracts “to follow” in Spring 2026. These rules, amongst other things, will introduce constraints on pressure selling and will give the CMA greater enforcement powers, increasing the level of fines that can be imposed.
With the regulatory climate indicating there will be an increased scrutiny on ticket sales, it is advisable to obtain legal advice.
If you have any concerns or questions on your pricing practices or the use of dynamic pricing, please get in touch with a member of our regulatory risk and compliance team, or your usual Shepherd and Wedderburn contact.