Dynamic pricing explained: consumers Look Back in Anger at Oasis ticket pricing
Dynamic or surge pricing is the practice of adjusting the price of a product in response to consumer demand for it. In the UK it is most often used for sales of hotel rooms and airline tickets and can be seen when prices for these services increase over the summer months or Christmas period, for example. This pricing model is regularly used in the USA to sell concert tickets but to date has not been commonly used for this purpose in the UK. The use of dynamic pricing of tickets by Ticketmaster for Oasis’ stadium tour has disappointed many consumers and has drawn the attention the ASA, the CMA and the UK Government.
ASA Code of Practice
The prices of the Oasis concert tickets were marketed in advance of them going on sale on 31 August 2024. The advertised price of standing tickets was given as £148.50, which in some instances rose to £355.20 at the point that consumers reached the online check-out. All non-broadcast marketing communications are subject to the advertising rules set out in the Advertising Standards Authority (ASA)’s Code of Practice (the Code).
The Code contains rules governing what must be included in marketing communications which give the price of a product. Under rule 3.1 of the Code;
Marketing communications must not mislead the consumer by omitting material information.
Rule 3.4 states that where marketing communications quote prices for advertised products, “material information” includes “the price of the advertised product… or…the manner in which the price is calculated”. Rule 3.17 also makes clear that “Price statements must not mislead by omission”. It is therefore significant that many consumers were reportedly unaware that the prices of tickets could rise from the advertised price until they reached the checkout stage of the transaction. The ASA has received hundreds of complaints from consumers because of this and is reportedly assessing them to determine whether to launch an investigation.
Consumer Law
It has been reported that consumers only became aware of the increased ticket price when they reached the check-out stage of the transaction, which gave only a limited time to make the purchase. This meant that consumers were only given a short time in which to decide whether to accept the increased price where in some cases, consumers had waited for hours online to get to the check-out page. Ticket prices were also changing very quickly over the minutes and hours of 31 August.
Regarding those consumers who did decide to pay the increased price and so completed their contract with Ticketmaster, the terms of their contracts are governed by the Consumer Rights Act 2015 (CRA 2015). Under Part 2 of the CRA, all written terms in contracts between a trader and a consumer must be transparent, which means it is expressed in plain and intelligible language and is legible (s68). And Schedule 2 of the CRA includes a grey list of terms which are likely to be unfair. Para 10 Sched 2 specifies that “a term which has the object or effect of irrevocably binding the consumer to terms with which the consumer has had no real opportunity of becoming acquainted before the conclusion of the contract” is likely to be unfair and so a breach of CRA 2015. If it could be shown that consumers completed their ticket purchases without having the opportunity to become aware of, or understand, that the tickets were subject to dynamic pricing, the CRA 2015 could be relevant.
Public Perception
It has been widely reported since the Oasis tickets sale that consumers were angered and disappointed with the use of the dynamic pricing model by Ticketmaster. The outcry has been such that the UK government has taken notice and has issued a call for evidence on the Oasis ticket sale. However, dynamic pricing of concert tickets is common in the USA, and Ticketmaster’s parent company Live Nation regularly sells tickets in this way.
The fact that ticket prices can rise so significantly when linked to demand perhaps suggests that their face-value is often below their actual market value. For example, in 2022 fans in the USA were reportedly offered prices as high as $5000 for Bruce Springsteen tickets where dynamic pricing was used. Since the rise of services such as Spotify, concert tours are the main way in which artists can make money from their music, and therefore if we want access to the arts to be democratic and keep prices lower than their actual market value, other ways of funding artists may be needed. Without this, we may have to get used to dynamic ticket pricing when purchasing concert tickets, whether we wish to or not.
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