StubHub’s costly encore: Online ticket reseller fined for drip pricing

The Competition Markets Authority (CMA) has continued its crackdown on drip pricing, under the Digital Markets Competition and Consumers Act 2024 (DMCCA).

The CMA has ordered StubHub UK (StubHub), a ticket resale marketplace, to refund more than 50,000 customers and pay a fine of almost £900,000 for drip pricing mandatory fees to them.

The investigation into StubHub follows the CMA’s recent investigation into Automobile Association Developments Limited (the AA) for failing to display the entire booking costs to learner drivers.

Pippa Garden, trainee solicitor in our commercial team, explores the details of the investigation into StubHub, its outcome and the practical implications for businesses selling directly to consumers.  

Recap – what is drip pricing?

Drip pricing is where a trader advertises a product or service for sale without displaying all of the unavoidable fees, charges or taxes connected to it (disclosing them at a later in the customer’s purchase journey). For example, adding booking fees and taxes at the checkout stage.

Drip pricing is an unfair commercial practice and is prohibited under the DMCCA.

Emma Cochrane, executive director of consumer protection at the CMA, confirmed, “hitting customers with hidden fees is illegal. It’s not fair to draw people in with what looks like a good deal, only for them to find the real price is higher when they get to the checkout due to extra charges that can’t be avoided”.

The StubHub UK investigation

Between 6 April and 7 December last year, the CMA identified that some 51,350 customers who had bought tickets for events through StubHub had been required to pay additional mandatory costs such as delivery and service fees, which were not set out in the price breakdown until the final stage of the checkout process.

The outcome

Following the conclusion of the investigation, the CMA has fined StubHub £889,200 for breaching consumer protection laws and ordered it to issue refunds exceeding £590,000 to its affected customers (on average, StubHub have been ordered to pay £10.33 per affected transaction).

Whilst the financial penalty applied by the CMA is substantial, the CMA have acknowledged that StubHub admitted to breaking the law and has since taken steps to rectify any non-compliant behaviour. Due to this, the CMA decided to apply a 40% reduction to the penalty that it had initially intended to impose.

StubHub’s response 

In response to the investigation’s outcome, StubHub said that its “UK platform is designed to display all fees upfront” and that the hidden fees that were identified were as a result of an “isolated platform error” that led to them appearing at the checkout stage rather than earlier in the process.

Practical implications

The outcome of the StubHub investigation, coupled with the CMA’s enforcement action against the AA last year, demonstrates that the CMA has no intention of slowing down its crackdown on ensuring compliance with the DMCCA anytime soon. In fact, the CMA have reiterated its “message to businesses is simple: be transparent on costs or risk CMA action”.

It is therefore key that businesses that sell to consumers (particularly those doing so online) ensure that their pricing practices are UK consumer law-compliant.

At a minimum, the CMA expects businesses to: 

• show the total price upfront;
• include all mandatory charges; and
• clearly explain how customers can calculate the total price, where this cannot be given in advance. 

If you need advice on how to make your online pricing practices UK consumer law-compliant, or if you would like more information on consumer law more generally, please contact David Wozniak on [email protected] or 0191 211 7831.