Are Hidden Fees Killing Your Online Shopping Experience? The CMA Investigates Eight Companies!

Investigations by the UK’s Competition and Markets Authority (CMA) have been launched into eight companies, including well-known ticket resellers and driving schools, amid a thorough review of online pricing practices. This marks the first use of the CMA’s new consumer protection powers aimed at examining questionable sales tactics such as mandatory additional charges, automatic opt-ins, and time-limited sales.

The companies under scrutiny include StubHub, Viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Wayfair, Appliances Direct, and Marks Electrical. CMA chief executive, Sarah Cardell, emphasized the importance of clear pricing in helping consumers shop confidently, especially with household budgets being tight.

This investigation follows a significant review of over 400 businesses across various sectors, ensuring compliance with pricing transparency regulations. With the introduction of the Digital Markets, Competition and Consumers Act, the CMA now has expanded authority to address anti-competitive behavior without needing to go through the courts, allowing them to order compensations or impose hefty fines that could reach 10% of global turnovers.

The CMA’s investigations are focused on practices like drip pricing, where additional fees emerge only at the checkout stage, and the use of misleading countdown timers. Updates on this investigation are expected in March next year.

Consumer advocacy groups are pleased with the CMA’s action, urging the regulator to impose fines on any firms found violating consumer laws. Additionally, about 100 other businesses have been warned to adhere to pricing guidelines to avoid enforcement action, covering a wide range of sectors from holiday services to fitness and online retail.

The investigation aims to ensure transparency, as seen in the concerns regarding how fees and additional costs are presented during the purchase processes at various companies. For example, StubHub and Viagogo are being investigated to see if all applicable fees are disclosed early in the buying process, while Gold’s Gym is under scrutiny for how joining fees are presented. Likewise, Wayfair’s sales tactics and Marks Electrical’s automatic opt-in practices for extra services are being closely examined.

Despite these concerns, companies like Buy It Direct (parent of Appliances Direct) and Wayfair have expressed willingness to cooperate with the investigations, defending their pricing practices as compliant. The responses from these companies highlight their commitment to following applicable laws and maintaining transparent practices.

As the landscape of online commerce continues to evolve, this CMA investigation serves as a critical reminder of the need for fair pricing practices and the rights of consumers to make informed purchases without hidden fees.