Analysis Group Consultants Summarize ABA Webinar on Drip Pricing and Junk Fees
April 25, 2024
Analysis Group Vice President Juliette Caminade, Manager Jane Choi, and Associate Alvaro Ziadi have published a recap of the American Bar Association (ABA) webinar “Drip Pricing & Junk Fees: All Wet, or a Serious Antitrust & Consumer Protection Issue?” in the ABA Pricing Conduct Committee’s newsletter, The Price Point. The discussion was hosted by the ABA’s Pricing Conduct Committee and moderated by Kathleen Kim (Latham & Watkins). Panelists included Analysis Group academic affiliate Steven Tadelis (Haas School of Business at the University of California, Berkeley), James Musgrove (McMillan), Maureen Ohlhausen (Baker Botts), Brinsley Dresden (Lewis Silkin), and Amy Mudge (BakerHostetler). The authors summarize the panelists’ discussion of the potential harms of drip pricing (i.e., revealing the total price only at the end of a buying journey, with fees being deceptively added at each stage of the journey) and junk fees (i.e., hidden fees) to consumers. They also summarize the panelists’ exploration of related policies and actions taken by regulators in the US, the UK, and Canada.
Professor Tadelis described the findings from recent economic literature on drip pricing. The other panelists then discussed different legal and regulatory approaches from the UK, Canada, and the US. Mr. Dresden provided an overview of UK regulators’ pricing transparency requirements; Mr. Musgrove described Canadian regulators’ perspectives on drip pricing; Ms. Ohlhausen explained how the Federal Trade Commission (FTC) evaluates unfair or deceptive pricing; and Ms. Mudge discussed recent and proposed drip pricing–related legislation from the FTC, California, and Massachusetts.