Executive Summary
- What’s new: The CMA has ordered two UK driving school providers, AA and BSM, to refund more than 80,000 customers and pay a fine of £4.2 million over drip pricing.
- Why it matters: The case is notable as an early and visible use of the CMA’s enhanced consumer enforcement powers, which came into force in April 2025 under the Digital Markets, Competition and Consumers Act 2024. The CMA has previously identified consumer law enforcement — and online pricing transparency in particular — as a strategic priority.
- What to do next: The key takeaway is that pricing practices, particularly in digital sales channels, now represent a materially heightened regulatory risk. Any business that relies on multistage pricing, add-ons or complex checkout flows, such as ticketing and live events, travel and hospitality, e-commerce, and subscription, should expect increased regulatory attention and check their pricing policies for compliance with UK consumer laws.
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Background: Drip Pricing and the DMCC Act
The UK Competition and Markets Authority (CMA) concluded that two nationwide driving school providers, AA and BSM, advertised driving lesson prices not reflective of the true cost. Additional, unavoidable charges were introduced later in the booking process, after customers had booked lesson timeslots and after they had entered their personal details. The initial headline price was never genuinely attainable. The CMA labelled this practice “drip pricing.” To resolve the CMA’s concerns, the CMA ordered the companies to pay a £4.2 million fine plus £760,000 in compensation for 80,000 affected customers, as well as to amend their pricing practices going forward.1
This fine is a consequence of a broader transformation of the UK’s consumer protection regime under the Digital Markets, Competition and Consumers Act 2024 (the DMCC Act or the Act). Amongst the many changes the DMCC Act introduced, the Act now grants the CMA the power to enforce consumer protection legislation directly, with no need for a court order, as under the previous regime.
In addition, the CMA now has the power to impose fines of up to 10% of global turnover for infringements of consumer law, bringing consumer enforcement closer in profile to competition law.2 The CMA’s direct enforcement powers also extend to “enhanced consumer measures,” which (as in this case) may include requirements to provide retrospective compensation to consumers, or to permit early contract termination.3 This combination of direct enforcement capability, broad remedial powers and turnover-based penalties represents a material intensification of the CMA’s enforcement toolkit, and increases the risk profile facing businesses.
Drip pricing has no statutory definition under English law. However, the CMA’s guidance describes it as “[t]he practice of showing consumers an initial headline price for a product and subsequently introducing additional mandatory charges as consumers proceed with a purchase or transaction.” This reflects changes to the underlying legislation specifically targeting drip pricing, which now require any ‘invitation to purchase’ to provide a total or headline price that includes all mandatory fees a consumer must pay. The previous rules only required setting out the “price, including any taxes,” or the means of calculating it, with no mention of mandatory fees.
CMA Enforcement Focuses on Consumer Protection and Online Pricing
This investigation symbolises a broader CMA focus on consumer protection and online pricing practices. Indeed, the AA/BSM case is identified in a CMA press release launching its “major consumer protection drive” on online pricing. The same focus features in the CMA’s 2026-2027 annual plan and in recent blog updates.4 As the CMA’s chief executive, Sarah Cardell, emphasised, consumers should be able to “know what you’re paying upfront,” stating that the CMA is taking action on “online sales tactics, including drip pricing.”5 Ministerial announcements accompanying the entry into force of the DMCC Act highlighted that mandatory fees must not be “deceptively dripped in throughout the checkout process, to dupe customers into paying more than they originally bargained for.”6
Issues around price transparency have previously surfaced in high-profile contexts such as ticketing for major live events, with Ticketmaster’s alleged use of “dynamic pricing” algorithms when pricing Oasis Live ’25 tour tickets last summer attracting regulatory and political scrutiny.7 The CMA investigation into Ticketmaster also underlines the CMA’s position that pricing compliance applies across an entire digital purchasing journey — with “invitations to purchase” arising at multiple stages and DMCC Act obligations attaching from initial advertising through to the final checkout.8
Implications for Businesses and Investors
For large corporates and private equity investors, the key takeaway is that pricing practices — particularly in digital sales channels — are a materially heightened regulatory risk.
First, the shift to direct enforcement significantly lowers the procedural barrier to intervention. Businesses can expect faster and more frequent investigations, with more immediate outcomes.
Second, the introduction of turnover-based fines creates meaningful financial exposure, particularly for multinational groups. Even where fines are not imposed at the upper end of the scale, the combination of penalties, possible mandated refunds and reputational impact could have an egregious effect.
Third, the requirement to compensate consumers highlights the potential for retrospective liability. This is particularly relevant in diligence contexts, where historic pricing practices may give rise to ongoing risk post-acquisition, even where compliance is subsequently achieved.
Finally, a “one size fits all” approach to pricing for multinational corporates without specific consideration of these UK rules is likely to create material enforcement risk, given the UK’s increasingly distinct and more interventionist consumer enforcement regime.
Recent news that the UK government has asked the Law Commission to assess whether the way consumer laws are enforced could be strengthened through the introduction of a consumer class action regime shows the policy focus in this area is only increasing.9
Risk Sectors
Whilst the present case concerns driving schools, the underlying issues are highly transferable. Sectors likely to attract scrutiny include:
- Ticketing and live events, particularly where fees are layered into the purchasing process.
- Travel and hospitality, including airlines, hotels and booking platforms.
- E-commerce and online marketplaces.
- Subscription-based digital services and platforms.
More broadly, any business that relies on multistage pricing, add-ons or complex checkout flows should expect increased regulatory attention.
Conclusion
This case marks an important development in the CMA’s emerging consumer enforcement strategy. The combination of new powers and a clear policy prioritisation suggests that drip pricing and related online pricing conduct will remain firmly in the regulator’s sights. For businesses operating in the UK, the message is clear: Pricing transparency is a core compliance issue with real enforcement and financial consequences.
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1 The CMA applied a 40% discount to the initial £7 million fine, noting that AA had engaged constructively with the CMA to resolve its concerns, admitted to breaching the law and offered an early settlement. See the CMA press release.
2 DMCC Act, section 182(6).
3 DMCC Act, section 182(2) and (4) and section 221(1) and (2).
4 See the CMA press release. Also see page 11 of the CMA’s 2026-2027 Annual Plan and the CMA’s recent blog post.
5 See Sarah Cardell’s LinkedIn post.
6 See the government press release.
7 The CMA concluded that Ticketmaster had not used a dynamic pricing model, instead employing a “tiered pricing” model. For more information, including on the CMA’s submission to the Business and Trade Committee, see the CMA case page.
8 See, e.g., CMA209, para 3.15.
9 See the Law Commission website.
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