Ticket reseller StubHub UK has been ordered to refund more than 50,000 customers and pay a £900,000 fine for not showing people the total price upfront when buying tickets.
Each customer is expected to receive £10 on average per transaction, following an investigation by the Competition and Markets Authority (CMA).
The regulator said StubHub UK would contact fans about their refund.
StubHub International said the hidden fees were as a result of an “isolated platform error” that led to some charges appearing at checkout rather than earlier in the buying process.
“Our UK platform is designed to display all fees upfront,” it said, adding that it had “identified and corrected the issue promptly, and all affected customers will receive an automatic refund”.
The fine for StubHub International, which operates in Europe, comes as the CMA investigated several firms as part review of online pricing practices, such as drip pricing, which was banned last year.
Drip pricing is when fees and charges are introduced later in the buying process rather than upfront, giving customers the impression that a product is cheaper than it really is.
“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,” said Emma Cochrane, executive director of consumer protection at the CMA.
The CMA found between 6 April and 7 December last year that some customers buying tickets for gigs and sports events via StubHub UK were required to pay mandatory costs such as delivery and service fees, which were unavoidable but only added at the final checkout stage.
The regulator said StubHub UK admitted breaking the law and received a 40% reduction to its financial penalty. It has also taken steps to “end the conduct”, it added.
StubHub UK has been contacted for comment.
“Going to a live gig or sports game is an event many people save for – and our action today means thousands of fans will get back money taken unfairly through hidden fees,” said Cochrane.
“Our message to businesses is simple: be transparent on costs or risk CMA action.”
Last year, the CMA also launched investigations into Viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Wayfair, Appliances Direct and Marks Electrical.
It is looking into practices including pressure selling, drip pricing, and misleading countdown clocks as part of its investigations.
Under the Digital Markets, Competition and Consumers Act introduced last year, the CMA has powers to tackle anti-competitive behaviour.
It can now decide if consumer laws have been broken – rather than having to go through the courts and can order businesses to pay compensation to affected customers, and fine companies up to 10% of global turnover.
At the same time as announcing the fine for StubHub UK, the CMA said its investigation into Viagogo over its presentation of fees was ongoing and that an update was due later this summer.
In March, the CMA ordered the owner of the AA and BSM driving schools to pay refunds to more than 80,000 learners after failing to disclose the total price for lessons upfront during booking online.
Consumer group Which? the regulator’s action served as a stark warning.
“The law is clear: hitting customers with hidden, extra fees that aren’t clearly disclosed from the start is completely unacceptable, so it’s good to see the CMA using its new powers to secure hard-earned money back for consumers and issue a significant fine,” Rocio Concha, its policy director said.
