Angelique Bret, Partner and specialist in competition law and consumer protection at Pinsent Masons

Businesses across sectors have been advised to review their approach to dynamic pricing after the practice drew scrutiny in the context of Oasis’ reunion tour.

A UK and Ireland tour next summer will mark the first time the band’s two most prominent members, brothers Noel and Liam Gallagher, have played together since 2009.

Millions of people reportedly tried to purchase tickets, many queuing for hours online to do so. By the time some fans reached the front of the queue, some of the remaining available tickets were being advertised at more than double the price than they had been available for earlier in the day.

Some Oasis fans complained to the Advertising Standards Authority and the UK government has promised to address “issues around the transparency and use of dynamic pricing, including the technology around queuing systems which incentivise it” as part of a wider regulatory review.

Dynamic pricing is where the price of goods or services goes up or down according to demand. The Oasis case is an example of how commercial practices can draw mainstream attention and highlights how implementing dynamic pricing structures can raise questions of competition or consumer law compliance.

For some businesses, implementing a flexible pricing strategy that reflects peaks and troughs in demand for their goods and services will make perfect economic sense. It is a practice that is often deployed by service providers in the transport industry, for example.

It is increasingly being explored by businesses that might be said to be operating in the entertainment industry – Spanish football club Valencia, for example, recently announced its intention to deploy dynamic pricing for tickets to its home matches.

In the UK, operating a dynamic pricing model is not illegal per se, but there are some legal considerations for businesses seeking to implement one. A risk of non-compliance with competition risks can arise from the application of dynamic pricing structures if a business can be said to be dominant in its market.

If systems that enable dynamic pricing for a dominant company’s goods or services lead them to set what might constitute excessive prices, those companies could face claims that they are abusing their dominant market position and as such breaching competition law.

There are also UK consumer protection law issues that all businesses deploying dynamic pricing structures need to consider, with rules in place that protect consumers against misleading or unfair commercial practices.

A commercial practice can be misleading where it contains false information or presents information in a way that deceives an average consumer, and the practice causes the average consumer to take a transactional decision they would not have taken otherwise.

A commercial practice can also be misleading if material information is omitted or hidden. The specific circumstances and design of a dynamic pricing practice requires consideration in this context.

In the UK, a new law has entered into force, but has yet to take effect, which will give the Competition and Markets Authority scope to take enforcement action against businesses that breach UK consumer law without having to go to court to do so.