The Competition and Markets Authority (CMA) has imposed a financial penalty of £4.2m on driving school owner Automobile Association Developments Limited (AA) for infringing consumer protection law. It has also ordered AA to refund £760,000 to 80,000 learner drivers.
What did AA do wrong? In short, people booking driving lessons between April and December 2025 were shown prices that did not include a mandatory £3 booking fee. Failing to include the booking fee in the up-front price is – to use the terminology of the Digital Markets Competition and Consumers Act 2024 (DMCCA) – an ‘omission of material information from an invitation to purchase.’
Although the fine is substantial enough, it could have been worse. AA received a 40% reduction to its financial penalty in return for admitting that their online pricing was not compliant with the DMCCA and agreeing to settle the case early.
The CMA press release published on 15 April offers up the following commentary on its enforcement action:
“Under consumer law, businesses must show all unavoidable charges in the headline price from the outset, enabling people to make informed choices. Adding extra charges later in the process – a practice known as drip pricing – can result in consumers being misled into choosing a service or product for its low price, only for this to be upped at the checkout.
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. Service fees – such as booking or processing charges – were found to be particularly problematic, as they were typically mandatory and revealed late in the checkout process.
When the CMA’s strengthened consumer powers came into force in April 2025, it committed to prioritising enforcement against this kind of practice, as well as other unlawful online pricing practices.”
Comment
The CMA is pursuing similar investigation into the online practices of 100 companies in a range of sectors, including holiday travel, homeware retail, rail travel, parking, bus and coach travel, luggage storage providers, cinemas, live event tickets, food and drink delivery companies, letter and parcel delivery, gyms and fitness, fashion, and online vouchers.
The CMA’s enforcement action against AA is an early marker of regulatory intent to enforce the laws relating to price transparency. Any clients selling their products or services online should review their sales process as a matter of urgency to ensure DMCCA compliance.
The CMA’s clear pricing campaign offers a useful starting point for anyone needing a basic primer of what the law requires. It is worth noting, however, that this is one of those situations where the devil is in the detail. If you are unsure about how the rules apply to your situation it may be worth obtaining specific legal advice.
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