Recent enforcement action by the Competition and Markets Authority (CMA) has put drip pricing firmly in the regulatory spotlight. The message for businesses is clear: consumer pricing must be transparent from the outset, or the consequences can be severe.

The background to this being back in the headlines is that on 15 April 2026, the CMA announced the settlement of its drip pricing investigation into the AA Driving School and BSM Driving School, both owned by Automobile Association Developments Limited (the AA). This was the first case in which the CMA has used its new enforcement powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA) to fine a business and order refunds to consumers. Further investigations, including into Gold’s Gym, remain ongoing, with updates expected later in 2026.

For businesses that sell goods or services to consumers online, this development marks a significant shift in risk and enforcement.

What is drip pricing?

Drip pricing is a pricing practice where a consumer is shown an initial headline price, but additional mandatory charges are added later in the purchasing process. These extra charges are often revealed only once the consumer has progressed through several steps of an online journey. Common examples include booking or administration fees, mandatory service or processing charges and unavoidable joining or set‑up fees. While each individual fee may appear small, drip pricing can materially affect a consumer’s decision about whether to proceed with a purchase. That is why it is now expressly targeted under consumer protection law.

The DMCCA provisions on drip pricing are designed to protect consumers. They apply to business‑to‑consumer (B2C) transactions, where the customer is an individual acting outside their trade or profession. Many businesses operate consumer‑facing websites, platforms or booking systems, and it is those consumer interactions that fall squarely within the CMA’s enforcement remit. If your prices are presented to consumers, consumer law applies.

The legal requirement: total price upfront

Under the DMCCA, where a business makes an “invitation to purchase” (broadly, presenting a product or service together with a price), it must clearly show:

• the total price, and
• all mandatory charges, included from the start
   

It is not enough for fees to be revealed later in the checkout process, even if they are shown before payment is taken. If a charge is unavoidable, it must be included in the initial price the consumer sees. Failing to do so can amount to an unlawful omission of material information.

Sarah Cardell, Chief Executive of the CMA, said “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”.

The AA case: a clear warning to businesses

In its investigation, the CMA found that more than 80,000 learner drivers booking lessons online with AA Driving School and BSM Driving School were not shown the full price upfront. In relation to new customers, the full price was only shown at checkout, after lessons had been selected, times chosen and personal details entered. It was at that point that a mandatory booking fee of £3.00 was added to the price. With regard to returning customers, the booking fee was shown separately from the initial price and only included in the total price on a following page, at checkout.

The CMA concluded that this breached consumer protection law.

As a result:

• the AA was fined £4.2 million (reduced from £7 million following agreement to early settlement), and
• ordered to refund over £760,000 to affected consumers
  This failure therefore cost the AA nearly £5 million.

This was the first time the CMA has imposed a financial penalty and secured consumer redress using its new DMCCA enforcement powers.

Although the AA admitted the breach and settled early, securing a 40% reduction in the fine, the case demonstrates that co-operation does not avoid liability. It may reduce the penalty, but fines, refunds and reputational damage can still follow.

Ongoing enforcement: this is not a one‑off

The CMA’s action against the AA is part of a broader enforcement programme. Investigations into a number of businesses were launched in November 2025, and there may well therefore be other fines announced in time. These are the first actions taken under the CMA’s strengthened consumer enforcement regime, and they signal a clear intention to take swift and decisive action where consumer pricing rules are breached.

Why this matters for consumer‑facing businesses

For businesses that sell to consumers - particularly online - there are several important lessons:

• Small fees can create big risk - In the AA case, the booking fee was just £3. Nevertheless, the overall cost of enforcement ran into millions. The law does not distinguish between “small” and “large” mandatory charges.
• The whole customer journey matters - The CMA will assess how prices are presented across the entire purchasing process, including websites and apps, mobile and desktop journeys, pop‑ups, tick‑boxes and booking screens. Compliance is not limited to headline advertising alone.
• Enforcement is now faster and tougher - Under the DMCCA, the CMA can investigate, decide breaches and impose fines without going to court. This significantly increases both the speed and impact of enforcement action.
• Mixed audiences increase risk - Businesses that serve both consumers and businesses using the same pricing structures or websites must take particular care. If pricing is consumer‑facing, it is likely to be assessed under consumer law.

Practical steps for businesses

Businesses selling to consumers should take proactive steps now, including:

• reviewing all consumer‑facing pricing and fee structures
• mapping the full consumer purchasing journey
• ensuring all mandatory charges are included in the first price shown
• training marketing, sales and product teams on consumer pricing rules
• documenting compliance decisions and internal reviews
   

Early legal advice can help identify risk before it becomes a regulatory issue with damage to reputation bundled in.

The CMA’s successful investigation and action against the AA marks a turning point in consumer pricing enforcement. Drip pricing is no longer an area of guidance and warnings, it is an area of real penalties and mandatory consumer refunds. For businesses that sell to consumers, the safest approach is straightforward: be transparent, be upfront, and assume your pricing will be scrutinised.

If you would like advice on consumer pricing, online sales journeys or compliance with the DMCCA, the Commercial Team at Eaton Smith LLP would be pleased to help.

Disclaimer: Nothing in this piece is legal advice and the issues covered are non-exhaustive. It is intended to provide information of general interest about current legal issues. As all circumstances are different, you should take specific legal and accountancy advice before acting in reliance on any of the information provided.