Dynamic pricing became a household term during the sale of Oasis concert tickets in the late summer.  After queuing for several hours online, many fans complained that the tickets they were offered ended up costing substantially more than the prices that had been advertised originally. 

As a reminder, dynamic pricing is a pricing strategy in which businesses set flexible prices for products or services based on current market demands. The price increases and decreases are carried out by software that collects data and uses algorithms to adjust pricing according to demand (and other pre-set but often quite opaque rules).   As we explained at the time of the Oasis concert debacle, it is lawful in principle, but needs to be implemented carefully to avoid consumer law problems.

The CMA has now opened a project to consider how dynamic pricing is being used across different sectors of the economy.

The project will gather views from businesses in various industries, including travel and leisure, that use pricing practices that might be considered dynamic pricing. It will also engage with consumer groups and other regulators to obtain their views. The project will consider:

• different scenarios where dynamic pricing strategies are being used;
• commercial and consumer benefits of dynamic pricing strategies; and
• whether dynamic pricing strategies create challenges for consumers and competition.

The work will help to inform government’s consideration of the issues raised by dynamic pricing, for example, as part of its upcoming call for evidence on price transparency in the live events sector.  

The project is neither a formal investigation under the CMA’s competition or consumer enforcement powers nor a formal market study or market investigation. The CMA is carrying it out under its CMA’s general review function, under section 5 of the Enterprise Act 2002. It is separate to the CMA’s investigation into the sale of Oasis concert tickets by Ticketmaster.