Dynamic pricing is a practice in which the price of a product is continuously adjusted in response to real-time supply and demand, and it should be distinguished from personalised pricing. Dynamic pricing is a modification of the price based on real-time supply and demand trends, whereas personalised pricing adjusts prices by processing personal data (e.g. shopping habits, sensitive data etc.) and profiling consumers.
In addition to the entertainment industry (concerts, exhibitions, sporting events), dynamic pricing is also used in tourist accommodation such as hotels and short-term rentals, and across the transport sector, including ridesharing apps.
Nevertheless, the practice of dynamic pricing creates a sense of mistrust between consumers and sellers, leading to inequalities in access to products, services and cultural experiences.
This practice prioritises corporate profits over public interest, and we are fighting to improve the situation. In the cultural sector, it remains to be seen as well, whether such price increases really benefit the artists. It should also be noted that the dominant position of Ticketmaster in ticket distribution increases the risk of exaggerated concerts prices.
Consequences of dynamic pricing
Dynamic pricing has led to massive price increases in ticket sales for major music events. When Beyoncé held a concert in Amsterdam, fans initially paid between €60 and €200 for their seats. A week later, tickets were still available, but they were now selling for up to €735. In the United States, tickets for a Bruce Springsteen concert skyrocketed to as much as $5,000. Sometimes, prices are increased, or charges are added during the booking process, and the consumer is not adequately informed.
Ticket prices are often not publicly disclosed in advance, leaving consumers unaware of the costs they will have to bear. The rapid price change further plays on people's emotions and their fears of missing out, all in the name of corporate greed.
With the lack of transparency, consumers become uncertain about how to budget accordingly and either end up overpaying or finding themselves unable to afford the tickets. Such a business model is creating a significant barrier to people’s right to participate in cultural life.
Who's behind it
When consumers are unhappy with a company’s business model, they often decide to switch to its competitors. However, after their merger with Ticketmaster, Live Nation Entertainment has become a monopoly in the ticket sales industry. It is estimated that they currently control 70% of the ticketing and live event venues market. Live Nation's deceptive practice of dynamic pricing extends all throughout Europe. As a result, everyone ends up being affected by this price gouging, no matter which member state they come from.
When corporations hold a monopoly over their market, consumers must accept their terms to access the service. Without the necessary competition, these monopolies are free to inflate prices as much as they wish – to the detriment of the consumer – even if it is for the smallest of profits. More importantly, these exorbitant prices prevent everyone but the most privileged in our society from being able to share in the spoils of our culture.
S&D position
The right to participate in cultural life is a human right as recognised by the United Nations. Everyone should be able to access, enjoy and contribute to our shared cultural identity. All consumers across the EU deserve equal treatment in the same or similar circumstances!
The S&D Group believes that the EU should be a place with robust consumer protection standards which ensure that its citizens are not duped or exploited. The practice of dynamic pricing creates a sense of mistrust between consumers and sellers and leads to inequalities in access to products, services and cultural experiences.
The S&D Group is calling for more transparency.
The public need to be informed when dynamic pricing is taking place. Consumers need to be told what to expect (e.g. what price fluctuation, how many tickets are sold at normal vs dynamic price, etc.). They should not find out during or at the end of a transaction. National consumer protection bodies will be key in enforcing this.
The S&D Group will also fight to limit price increases by setting a maximum allowable percentage.
Our action plan
The S&D Group will continue monitoring issues surrounding dynamic pricing in Europe and work towards ensuring strong protection for consumers.
Firstly, we want to make European consumers aware of the logic of dynamic pricing and its dangers.
Secondly, we believe that the European Union should take action to ensure adequate protection by requiring clear and sufficient information when Europeans are subject to dynamic pricing, and by ensuring that this does not result in excessive prices. In this regard, we call on the European Commission to make sure that these harmful practices are tackled in the future Digital Fairness Act.
We expect that the DFA will complete and improve all the aspects that were left unaddressed following the approval of the main digital laws in the previous legislature. We, the S&D Group, call on the Commission for a strong commitment to consumer protection and for more specific legislation to tackle:
- unethical techniques and commercial practices related to dark patterns
- marketing by social media influencers
- the addictive design of digital products
- online profiling
especially for the most vulnerable consumers and users, such as young people.