Ripoff Britain: Is variable pricing good for business? Good for consumers? Good for UK growth?

• Inquiry: Rip-off Britain: Dynamic pricing and consumer protection
• Putting fans first: consultation on the resale of live events tickets
• Business and Trade Committee

Many businesses stress that being able to vary their prices to consumers can allow them to manage costs, allow certain groups to better access otherwise pricey goods and services, and cope with changes in supply and demand.  

These and linked practices - like “personal” pricing of cheaper tickets aimed at students - are not new: familiar to many of us in the search for cheap flights and also in the pricey “local” outlets of the big supermarkets, while some pub chains have also begun charging higher prices for pints at peak times. 

In “drip-pricing” companies charge a lower headline price but then charge incrementally more for connected goods or services, while criticisms have been levelled at some companies for the way they shape the information, offers and choices presented to buyers as they search online.   

Government and the Competition and Markets Authority are currently considering some of these issues, including in an ongoing consultation on the resale of live events tickets.   

With reports that the head of the CMA is being replaced by ministers in the drive for a regulatory focus on growth, how do we balance consumer and competition protections with business’ search for profit? 

Chair comment

Chair of the BTC Rt Hon Liam Byrne said: “Hard pressed families up and down the land are still feeling the pinch and we fear that sharp practice from powerful firms jacking up their prices at the last minute is making a bad situation worse. Too many consumers simply don’t have the freedom - or time - to shop around, so we’re worried that too many people are now trapped, at the mercy off 'rip off Britain’. We’re determined to get to the bottom of what’s going on, so we can give some blunt advice to government about how to fix things.”

Call for evidence

The Committee is now calling for views, to be submitted as quickly as possible and ideally by 30 January, on any or all of these questions: 

• What are the reasons that businesses may need to dynamically adjust prices - as in surge-pricing on a rideshare or delivery app - or offer different prices to certain groups, like a discounted ‘student ticket’ for a theatre show? 
• What are the impacts of dynamic or personalised pricing on consumers, including vulnerable groups? Can dynamic pricing create a ‘poverty premium’, creating higher effective prices for consumers on low incomes?  
• How do the pricing strategies that businesses employ interact with other aspects of their platform or service, such as the choices presented to users? 
• How effective is the UK’s competition law framework for regulating the pricing practices of businesses?  
• What impact does dynamic pricing have on business value creation and the overall UK economic growth rate? Could tighter regulation negatively UK investment and growth rates?

Further information

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