Trainline shares plunge in London; UK competition regulator investigates pricing
The company is under fire for the delayed notification to customers of certain fees. The company says: “We are cooperating with the authorities.”
(Il Sole 24 Ore Radiocor) - Trainline’s share price has taken a nosedive on the London Stock Exchange after the UK’s Competition and Markets Authority (CMA) announced an investigation into its pricing practices. Shares in the London-based train and bus booking platform have consequently fallen by double figures. The CMA has stated that its investigation will focus on suspicions that the total price is not shown to customers in advance when purchasing tickets.
The procedure forms part of a wider effort by the Authority to tackle misleading pricing practices, particularly where mandatory fees are separated from the advertised price or added at a later stage during the purchasing process – a technique known as ‘drip pricing’. According to the CMA, these practices expose consumers to unexpected costs or force them to calculate the actual cost of the service themselves.
In addition to Trainline, the regulator is also investigating the practices of Virgin Atlantic and Red Driving School. As regards Trainline, the investigation aims to establish whether all mandatory fees are included in the prices initially displayed to consumers who book train and bus tickets in advance via the company’s app and website. For train journeys, the CMA has identified transactions with fees ranging from £0.59 to £2.79, whilst for bus bookings, the booking fee amounts to £1.50.
All the companies under investigation have received ‘warning letters’ as part of what is the CMA’s first consumer protection campaign, in which it is exercising its new supervisory powers. These letters formally notify the companies of their obligations under consumer protection legislation. The CMA has, however, made it clear that it remains concerned about their pricing practices following ongoing monitoring.
Should any non-compliance with the rules come to light, “the CMA may order companies to pay compensation to the customers affected, as well as impose a fine of up to 10 per cent of their turnover”, explains the Authority’s statement. In a brief statement, Trainline said that “it has been working proactively with the CMA for several months and is taking steps to improve the presentation of certain fees. We will continue to work constructively with the CMA to ensure that the customer experience remains transparent and compliant with the regulations”.
