Trainline sets aside nearly £4m over competition probe into pricing tactics
The CMA said in August it was investigating Trainline, Virgin Atlantic and Red Driving School over possible drip-pricing.
Ticketing platform Trainline has seen half-year profits slump as it revealed nearly £4 million set aside to cover costs relating to a competition probe into “drip-pricing” allegations.
The £3.7 million provision comes after the Competition and Markets Authority (CMA) said in August it was investigating Trainline, as well as airline Virgin Atlantic and Red Driving School, over concerns customers were not shown full prices upfront.
The Trainline investigation focuses on whether all mandatory fees were displayed upfront to travellers buying train and coach tickets in advance, on its app and website.
The CMA said it observed transactions with additional fees ranging from 50p to £2.79, with a £1.50 booking fee for coach journeys.
The probes are part of a wider clampdown by the regulator over misleading pricing practices, which includes practices where mandatory charges are separated from the headline price or added later in the buying process, known as drip pricing.
Consumers affected could get compensation if it is found that the companies broke the law.
The CMA will update on the case in January.
The provision contributed to a 17% drop in Trainline’s pre-tax profits to £55.2 million for the six months to August 31, sending shares down as much as 8% at one stage on Wednesday morning before they settled around 2% down.
Trainline said: “We continue to engage proactively with the CMA and other relevant regulators, looking for a swift resolution that ensures customers have clear and transparent information, and maintains a straightforward booking experience.”
It added the final financial impact to the group could vary considerably, given that the “ultimate outcome of the investigation remains highly uncertain and is very difficult to predict with precision”.
Trainline said earnings were also impacted by the wider clampdown on rail refunds, which cut fee revenues for the platform, which charges people to refund their tickets.
From April, rules changed so people can only request a refund before 11.59pm on the day before travel.