UK Competition and Markets Authority Issues £4.2M Fine and Orders £760k of Refunds for Drip Pricing

On April 15, 2026, the UK Competition and Markets Authority (CMA) fined a leading driving school, the AA, £4.2m and ordered the company, to refund more than 80,000 learner drivers over £760,000 for breaches of ‘drip pricing’ laws.

Noteworthy aspects

Two aspects are particularly noteworthy:

1. First substantive consumer law infringement penalty: This is the first time the CMA has required direct consumer refunds and also imposed a financial penalty for a substantive consumer law infringement under its new powers. It represents a significant milestone, demonstrating the regulator’s willingness to impose material fines and to secure compensation for affected consumers.
2. Maximum discount applied for early settlement: The £4.2 million fine reflects a 40% reduction from an initial £7 million penalty, following settlement. This is the maximum discount available. Settlement requires an admission of a consumer law breach and streamlined cooperation with the regulator. While this can deliver meaningful reductions in financial exposure and procedural efficiencies, it may not be appropriate in all cases – particularly given potential follow-on litigation risk, including class actions.

Background

The CMA’s investigation focused on the AA Driving School and BSM Driving School, both owned by the AA. From April through December 2025, customers booking driving lessons online were not presented with the full price upfront. Instead, a mandatory booking fee was introduced later in the purchasing process.

For new customers, the total price was revealed only at checkout. Returning customers were shown the booking fee separately, with the full price calculated at a later stage.

The CMA concluded that this constituted unlawful drip pricing, as mandatory fees must be included in the headline price from the outset to enable informed consumer decision-making.

This case follows closely behind the CMA’s first use of its fining powers for procedural non-compliance, underscoring the breadth of its new enforcement toolkit. Read about that here.

Practical takeaways for businesses

• Audit customer journeys: Review end-to-end digital journeys to ensure that all mandatory charges are clearly included upfront and journeys comply with new consumer law requirements.
• Prioritise high-risk practices: The CMA has identified certain priority enforcement areas, including drip pricing, which should be treated as priority compliance risks.
• Assess settlement strategy carefully: Early engagement may reduce penalties, but settlement carries various litigation and reputational considerations that must be weighed.
• Plan for combined exposure: The CMA can now impose both significant fines and consumer redress, increasing the financial, operational, and reputational effects of noncompliance. The financial costs and operational practicalities of implementing a consumer redress should be carefully considered

This decision reinforces the CMA’s intention to take decisive, deterrence-focused action against unlawful online pricing practices. With its strengthened powers now actively deployed, the CMA is moving from signalling to sustained enforcement.

Sidley’s Consumer Protection team has extensive experience advising clients on CMA investigations and consumer enforcement matters. If you would like to discuss the implications of this development, please contact a member of the team.