Dynamic ticket pricing helps combat ticket scalpers, the company behind $500 Green Day tickets claims – but music industry insiders and consumer groups dispute that, with some concerned the controversial practice skews live events to the rich.

Dynamic pricing – when the cost of products rise and fall according to demand – is well established in Australia, from Uber’s surge prices to utilities and airline fares.

It’s increasingly prevalent in entertainment, with Australian fans of Pearl Jam and now Green Day paying variously inflated amounts depending on when they bought their concert tickets. The Australian Grand Prix and Australian Open are also onboard, with seats at the 2024 men’s final fetching between $2,000 and $6,000.

On Wednesday, it was possible to buy “in demand” tickets to Green Day’s Sydney show for $399.60 to $499.60. Set price tickets started at $217.16, despite being advertised at $135.60. Tickets for the band’s Melbourne and Gold Coast shows were slightly lower and fixed at set prices.

Both Ticketmaster and Ticketek defended the practice, telling Guardian Australia prices were set by artists and their teams. They also claimed demand-driven pricing mitigates the problem of ticket scalping, when tickets are bought – often by AI bots – and resold at inflated prices.

“Artists and their teams set their prices and ticketing strategy. Ticketmaster helps execute,” a Ticketmaster spokesperson said. Cameron Hoy, the COO and head of global ticketing at TEG and Ticketek, said dynamic pricing “is directed from the artist and or promoter”.

Some artists have pushed back. The Cure labelled the practice “greedy”, while Taylor Swift chose set prices for her Australian shows and dynamic prices for other legs of her Eras world tour. Green Day’s management was contacted for comment.

In February, Michael Rapino, the president and CEO of Ticketmaster’s owner, Live Nation, told the company’s quarterly earnings meeting the “best sales pitch” for dynamic pricing – which he planned to roll out around the world – was that it ate into scalpers’ earnings.

Jarni Blakkarly of consumer rights group Choice has been investigating the “concerning” impacts of the trend that began in the US. He questioned Rapino’s theory, given Australian state and territory laws prevent resale values more than 10% above the original ticket sale value.

“If everyone purchased their tickets at different prices, how will the consumer know the price they are paying is 10% above the sale price?” he said. “I think dynamic pricing would make it harder to stop ticket scalping.”

Dion Brant, the CEO of Frontier Touring, which is promoting the tours of Luke Combs, Supergrass and Primal Scream, said about half a dozen of Frontier’s visiting artists, including Paul McCartney, have chosen to apportion a small number of dynamically priced “platinum” tickets as an anti-scalping measure.

Selling a small percentage of tickets dynamically “makes sense” because it caters to the portion of the market willing to pay more for guaranteed decent seats and the money goes to the artist rather than to “abhorrent” scalpers, he said.

But the practice is more questionable when a large portion of tickets is priced according to demand, he said.

“This notion of trying to drive demand to such a point where people will pay anything, or confuse them to such a point where they don’t know what the real price is … we’re really uncomfortable with and we look to avoid at any cost,” he said.

The practice is here to stay, said Blakkarly, who has seen dynamic pricing in US supermarkets forcing customers to pay more for chilled drinks on a hot day.

“There are no laws against it but there’s a valid discussion to be had about whether it should even be allowed in Australia,” he said, with the increasingly widespread practice raising “valid” questions around equity and ethics.

“At a minimum, companies need to be really open and transparent about how they are pricing tickets,” he said. “It really comes down to what consumers are willing to put up with.”

One of those was Green Day fan Madison Closter, who paid $280 for general admission to the “golden circle” standing-only section at the band’s Gold Coast show. The ticket was not dynamically priced but she said she was repeatedly unable to buy the tickets in her cart due to being told there was “no seating available for purchase”.

“This created a false sense of scarcity when purchasing,” she said.

“It is getting to the point where it is not viable for a lot of people to go to big concerts.”

Ticketek and Ticketmaster both said dynamic pricing works both ways, delivering discounted prices when demand is low – but Blakkarly said he had yet to witness that in practice.

“Do we really want to make a society where only the mega-rich can afford to go to a concert?” he said.

“There needs to be a broader public discussion about ticketing and whether live events should be more accessible to people from an equity perspective.”

An Australian Competition and Consumer Commission spokesperson said some businesses increase their prices during periods of high demand and while the practice is not illegal, businesses must not mislead consumers.

Stephen Jones, the federal assistant treasurer and minister for financial services, said businesses were required by law to communicate clear and accurate prices prior to purchase.

He said the government is focused on “improving consumer protections against dodgy products, scammers or predatory practices” and that it regularly seeks feedback on where there may be gaps in consumer protections.

Luke Howarth, the shadow assistant treasurer and shadow minister for financial services, said while businesses should be able to set their own prices, the emergence of dynamic pricing was “a new challenge for the existing regulation”.

In 2022, the Coalition introduced new disclosure requirements under Australian Consumer Law, requiring ticket resale websites to clearly disclose that they are a resale service and disclose the face value of tickets they are reselling.