‘Drip pricing’ will be banned as part of a range of measures to protect consumers outlined yesterday in the King’s Speech, which could raise the median cost of air fares by an estimated £80.
King Charles introduced a new consumer bill in his speech on Tuesday, which aims to protect consumers by prohibiting practices that add charges to basic advertised prices.
In his inaugural annual speech, the British monarch said ministers will “introduce new competition rules for digital markets”, referencing the Digital Markets, Competition and Consumers Bill designed to boost consumer protection and offer lower prices.
Supporting documents issued by the Prime Minister’s office said that consumer confidence will be increased by: “Taking new powers to enable growing consumer harms to be tackled, such as fake reviews and, subject to consultation, drip pricing (a practice where firms only advertise part of a product’s price upfront and reveal other charges later in the buying process).”
So-called ‘drip pricing’ is a common practice among airline operators and by limiting it, median air fares could cost an extra £80, including the hidden costs of adding luggage and seat bookings, according to an analysis carried out for the government.
The Digital Markets, Competition and Consumers Bill, brought forward from the last Parliamentary session, will crack down on drip pricing among retailers, communication companies and airlines that sell products online.
According to a policy research report by consumer protection organisation Which?, drip pricing can include prices that consumers have to pay to make a transaction, which might be fixed or variable, and include optional services that are added onto advertised prices.
Its research found that 86% of consumers believe that drip pricing is ‘sneaky’, particularly when retailers are not transparent or upfront about hidden costs. Only a tenth of the people surveyed said that they thought drip pricing tactics were fair.