Ticket reselling giant StubHub UK has been ordered to pay a significant fine of £900,000 and issue refunds to more than 50,000 customers, following an investigation by the Competition and Markets Authority (CMA). The regulatory body found that the company failed to present the full, final price of tickets upfront, instead adding mandatory charges such as delivery and service fees at the very end of the purchasing process.
Each affected customer is expected to receive an average refund of £10 per transaction. The CMA's inquiry revealed that between 6th April and 7th December last year, some customers buying tickets for various events, including concerts and sports matches, were only made aware of these unavoidable additional costs at the final checkout stage. StubHub International, which operates the UK platform, stated that the hidden fees were the result of an 'isolated platform error' which has since been identified and corrected, ensuring all affected customers will receive an automatic refund.
Emma Cochrane, Executive Director of Consumer Protection at the CMA, emphasised the illegality of such practices. She stated that it is unfair to entice customers with seemingly attractive prices only for them to discover higher true costs due to unavoidable extra charges at checkout. StubHub UK admitted to breaching consumer law, which resulted in a 40% reduction to its financial penalty. The company has also taken steps to rectify the conduct.
This enforcement action against StubHub is part of a broader CMA review into online pricing practices, particularly focusing on 'drip pricing', a practice banned last year. Drip pricing involves introducing fees and charges later in the buying process, giving consumers a false impression of a product's initial cost. The CMA is also investigating other practices such as pressure selling and misleading countdown clocks.
Under the new Digital Markets, Competition and Consumers Act, introduced last year, the CMA has enhanced powers to tackle anti-competitive behaviour. These new capabilities allow the regulator to directly determine if consumer laws have been broken, order businesses to compensate affected customers, and impose fines of up to 10% of a company's global turnover, without needing to go through the courts. Consumer group Which? welcomed the CMA's action, calling it a stark warning to other businesses.
The CMA also confirmed that its ongoing investigation into Viagogo regarding its fee presentation practices is continuing, with an update expected later this summer. This indicates a sustained effort by the regulator to ensure transparency and fairness in online transactions across various sectors.