Contributors: Ethan Cartwright and Ellen Huison.
As the dust settles on the first of the Competition and Market Authority’s (CMA) investigations into unfair pricing practices – which culminated in hefty financial penalties being handed down under new CMA enforcement powers – now is the time for businesses to audit their pricing practices to avoid getting caught out.
What is changing?
On 15 April 2026, the CMA fined Automobile Association Developments Limited £4.2 million for illegal drip pricing and ordered two AA-owned driving schools (together with Automobile Association Developments Limited, AA) and British School of Motoring (BSM) to refund thousands of consumers for booking fees not included in the upfront price – marking the first time that the CMA has used its new powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA) to order repayments to consumers.
In 2023, the Department for Business and Trade found that almost half of online businesses (46%) use hidden or dripped fees, with consumers estimated to spend up to £3.5 billion extra online each year as a result. Following the introduction of the consumer provisions of the DMCCA, the CMA launched investigations into unlawful ‘drip pricing’ and other ‘unfair commercial practices’ (mainly in the arena of online pricing) allegedly undertaken by eight businesses in November 2025. The investigation into the AA was the first to conclude, and demonstrates the pace at which the CMA is prepared to act.
The CMA found that learner drivers who booked lessons on the AA and BSM websites between April and December 2025 were shown a lower initial price that did not include a £3.00 mandatory booking fee, which was only revealed at the checkout stage. The practice of adding charges partway through or at the end of the purchase process, also referred to as ‘drip pricing’ is a banned practice under the DMCCA. The AA co-operated with the CMA and admitted that it had breached consumer law, before taking immediate steps to update its website to address the issue. Their co-operation helped to secure a 40% discount on the fine levied by the CMA (reducing the penalty from £7 million to £4.2 million), and the AA agreed to pay £760,000 in redress to 80,000 affected customers. Despite the AA settling the investigation with the CMA, its total penalty was still close to £5 million, not including legal and administrative fees.
How could the changes affect your business?
This decision demonstrates the robust approach that the CMA is taking to its new powers. Following a cross-market review of online pricing practices, it published price transparency guidance at the end of 2025 which affected businesses are expected to follow with immediate effect.
The guidance, which applies for anyone who advertises, markets, sells, or otherwise promotes products or services to consumers, outlines that:
- Consumers should be given the information they need to make informed decisions, shop around, and compare the prices of competing products.
- Prices should not be misleading and, wherever possible, consumers should be presented with the total price of the product at the outset.
- Practices such as the ‘drip pricing’ seen in the AA decision, or ‘partitioned pricing’ (where a business provides component parts of a price without giving the overall total), are prohibited – as they risk misleading consumers about the true price, and reduce the possibility to compare prices on a like-for-like basis.
A statement from the CMA’s Chief Executive following the AA decision illustrates the importance that the CMA attributes to ensuring compliance with consumer law:
‘If a fee is mandatory, the law is clear: it must be included in the price from the very start, not added at checkout, so consumers always know what they need to pay […]. With our new powers, it will never pay to break the law or treat consumers unfairly. Where the rules are ignored, we'll step in to put things right.’
What steps should you take to prepare?
If your business is in a consumer-facing sector, you should consider an immediate internal audit of your pricing and sales practices – including a review of every stage of your purchase process and experience for customers.
Be particularly mindful of ensuring that your purchase process does not, directly or indirectly, do any of the following:
- Present pricing information at the outset which does not include mandatory fees or charges (including delivery and booking fees) which are subsequently added to the price at a later stage.
- Break pricing information down into component parts without being clear about the overall total price.
- Involve time-limited offers which do not end when advertised.
- Automatically opt customers in for additional services.
- Provide unclear and insufficient information about upfront fees for an annual subscription or membership.
The CMA’s other investigations into drip pricing and other unfair commercial practices, including those outlined above, are still ongoing. We will keep you updated on the outcome of these investigations and any future developments in an area where the CMA clearly means business.
Key takeaways:
- Undertake an audit of the purchase process followed by your customers.
- Ensure your pricing practices are in line with the CMA’s 2025 pricing transparency guidance.
- Monitor the outcome of CMA ongoing investigations into unfair commercial practices and consumer-facing business practices.