Clear prices and conditions
These days, consumers are able to choose from many different options. But are consumers also able to make the right choice? That is only possible if prices and conditions are clear. With some products however, consumers only find out during the purchasing process that more and more costs need to be added. Think of service fees when purchasing concert tickets or when picking up a new car. We call this phenomenon ‘drip pricing.’ Companies must inform consumers before the actual purchase about the price and all additional costs, as well as about what they can and cannot expect from the product. Businesses owe such clarity to consumers, but also to one another. After all, if businesses are unclear about their prices and conditions, they help create an unlevel playing field.
The role of ACM
The Netherlands Authority for Consumers and Markets (ACM) makes sure that businesses comply with the rules on the provision of information. We work together with consumer associations and industry trade groups in order to promote compliance. Through our consumer information portal ConsuWijzer.nl, we educate consumers about their right to clear and complete information.
Responses to this theme
In a roundtable discussion with six trade associations and consumer organizations, ACM exchanged ideas about drip pricing. All participants agreed to the most important principle: when companies make consumers an offer, they must include all costs that consumers cannot avoid. The participants subsequently explored the question of how to apply this to the real world: how do you determine in a specific industry what costs are ‘additional’ and what costs are unavoidable? Will providers still have some freedom to present their products and services in different ways, for example ‘basic’ with additional options or perhaps ‘all-in’? These are the types of questions that we will tackle in 2016 with all parties involved.
On a dedicated website (denkmee.acm.nl), interested parties were able to join the discussion on the theme of clear prices and conditions by responding to five provocative statements. In addition, we put several provocative statements and questions on the Facebook page of ConsuWijzer for consumers to respond to. In the discussions on Facebook, consumers mostly talked about drip pricing when purchasing tickets for concerts or theaters. Consumers do not understand why such costs cannot simply be added to the price or at least mentioned next to the price. Furthermore, numerous consumers have shared with us their experiences with unclear conditions when taking out phone plans.
In 2016, ACM will launch an investigation into the problem of drip pricing. In addition, we will explore what problems consumers encounter with regard to unclear prices and conditions of telecom services. All of the experiences of consumers as well as any other responses received during the consultation round are valuable input to our strategy.