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The Competition and Markets Authority (CMA) opened a number of investigations into online pricing practices in November 2025 as part of its 'major consumer protection drive'.
The first of these investigations has now been closed and shows that the CMA means business.
The regulator investigated Automobile Association Developments Limited (trading as the AA, the AA Driving School, BSM and BSM Driving School) (AA). The CMA was concerned that the driving schools were presenting prices without including mandatory fees – an illegal practice known as drip pricing.
During its investigation, the CMA found that more than 80,000 learners were initially shown prices that did not include mandatory booking fees. These learners were presented with an additional £3 fee later in the online booking process – for new customers, this came after they had selected lessons, chosen times and entered their personal details.
The Final Infringement Notice was handed down today. The AA must:
- pay a financial penalty of £4.2 million for infringing consumer protection law;
- refund booking fees paid by affected consumers (over £760,000); and
- report back to the CMA with updates on the refund process.
This is the first financial penalty the CMA has imposed for a breach of consumer law using its new enforcement powers – and it is high! The AA is on the hook for almost £5 million in total. But it could have been even higher: because the AA engaged constructively with the CMA, admitted to breaking the law and agreed to settle the case early, the CMA reduced the financial penalty by 40%.
What does this mean for you?
The law is clear that all mandatory fees and costs must be included in all invitations to purchase, even early stage advertising. Therefore, if you advertise prices to consumers, whatever your product line, you are affected (read more about this in our previous article - Retailers and brands face a deluge of new challenges, as CMA intensifies action on drip pricing).
And if you engage in any of these practices – which have triggered this most recent CMA investigation and other investigations to date - then the risk of enforcement action will be high:
- Presenting prices which do not include mandatory fees.
- Not being sufficiently upfront about one-off initial fees for annual memberships or subscriptions.
- Time limited offers which do not end when they say they will (including countdown clocks which reset).
- Automatically opting customers into the purchase of additional services.
The CMA's action here should come as a warning. They're investigating, keeping up the pressure, imposing large fines and getting from investigation to penalty much more quickly.
Seven other businesses are also under investigation over issues related to price transparency. We will watch this space…
Read the original article on GowlingWLG.com
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