StubHub and Viagogo among eight firms investigated over pricing practices | Competition and Markets Authority

The UK’s competition watchdog has launched an investigation into eight companies over their online pricing practices, expressing concern over surcharges and sales tactics such as “drip pricing” and “pressure selling”.

Competition and Markets Authority (CMA) in question was scouring ticket sellers StubHub and Viagogo; AA Driving School and BSM Driving School; US gym chain Gold’s Gym; and retailers Wayfair, Appliances Direct and Marks Electrical.

The investigations are the first that the CMA has launched using its new consumer protection powers. The watchdog said it had concerns about practices such as drip pricing (where consumers are shown the initial price and then face additional charges during the checkout process) and the use of misleading countdown timers, which are banned under the new regime.

The investigations follow the CMA’s cross-economy review since April of more than 400 businesses across 19 sectors to assess their compliance with price transparency rules.

The watchdog also wrote advice letters to 100 businesses across 14 industries outlining concerns about surcharges and the use of sales tactics. It is publishing new guidance to help businesses comply with the law.

The regulator’s new powers enable it to decide whether consumer laws have been broken, rather than resorting to the courts. If the CMA finds that the law has been breached, it can order businesses to pay compensation to affected customers and fine companies up to 10% of global turnover.

“It’s important that people can shop online with confidence, knowing that the price they see is the price they will pay and that all sales are real,” said CMA CEO Sarah Cardell.

“If you’re spending your hard-earned money on concert tickets or driving lessons, signing up for a gym, or buying furniture and appliances for your home, you deserve a fair deal. Protecting consumers from misleading prices and illegal print sales is our job, and today represents an important milestone.”

Secondary ticketing sites StubHub and Viagogo are under scrutiny over mandatory surcharges consumers impose when purchasing tickets and whether those fees are included up front.

It is being investigated whether mandatory fees at AA Driving School and BSM Driving School are included in the total price that the consumer sees at the beginning of the purchasing process.

Gold’s Gym is under investigation after the one-time joining fee for its annual membership was not included in advertised membership costs.

Household goods retailers Wayfair, Appliances Direct and Marks Electrical are being investigated to determine whether their limited-time sales end when they say they do or whether customers are automatically included in purchasing additional services.

Rocio Concha, director of policy and advocacy at consumer group Which?, which says it repeatedly exposes “dangerous business practices”, said: “It is encouraging that the regulator has taken this action. It should not hesitate to use its new consumer enforcement powers to penalize firms that break the rules.”

“This action underscores the value of effective regulation in ensuring that unscrupulous firms do not gain unfair advantages over law-abiding companies.”

The investigation puts more pressure on Viagogo and StubHub. The latter company’s shares fell nearly 14% on Monday after the Guardian declared it illegal to resell tickets for profit as the government continues a long-awaited crackdown on sales and resale platforms.

AA Driving School said: “We are relieved that the £3 booking fee for lessons is already transparent and in line with CMA rules.”

Viagogo said: “We have consistently engaged constructively with the CMA and will cooperate fully with their investigation.”

Other companies were contacted for comment.