AA receives a juggernaut sized fine from the CMA: first financial penalty for breach of consumer law under Digital Markets, Competition and Consumers Act 2024

The Competition and Markets Authority (“CMA”) has imposed a juggernaut of a penalty for a breach of consumer law using the strengthened enforcement powers it acquired under the Digital Markets, Competition and Consumers Act 2024 (the “DMCC Act”). 

The AA has been ordered to pay a fine of £4.2 million and refund over 80,000 consumers after its AA Driving School and BSM Driving School brands failed to display the full price of lessons upfront when customers booked online — instead adding a mandatory £3 booking fee later in the checkout process, a practice commonly referred to as drip pricing. The action, which marks the first substantive fine imposed by the CMA under its new powers as well as the first time the CMA has used its new powers to secure money back for consumers directly, forms part of the regulator's wider campaign to clamp down on unlawful online pricing practices.

CMA clampdown on drip pricing

Under consumer protection law, businesses are required to show all unavoidable charges in the headline price from the very beginning, enabling consumers to make properly informed choices. The practice of withholding mandatory fees and introducing them later in the purchasing journey — known as drip pricing — is prohibited.

The CMA's investigation found that between April and December 2025, consumers booking driving lessons through the AA and BSM websites were not shown the total price from the outset, with the mandatory booking fee only included in the total price at checkout. 

As a result of its findings, the CMA has ordered the AA to repay more than £760,000 to affected customers and imposed a fine of £4.2 million, bringing the total cost to the business to nearly £5 million. 

The CMA's powers under DMCC Act allow it to impose fines of up to 10% of a company's global turnover, or £300,000 where that figure is higher, for breaches of consumer protection law. In this case, the fine was originally set at £7 million but was reduced by 40% to £4.2 million because the AA agreed to settle the case early under a streamlined administrative procedure that required it to admit to breaking the law and engage constructively with the CMA throughout the investigation. This 40% reduction reflects the maximum available where a company settles a case prior to the issue of a Provisional Infringement Notice by the CMA. 

CMS comment

If there was any doubt that the CMA is serious about flexing its new(ish) muscles in enforcing consumer law, that doubt has vanished in an instant. This enforcement action reaffirms that drip pricing is a priority area for the CMA, and that the CMA is set on levying significant fines against businesses, even where the relative perceived harm to consumers may be low, and the business cooperates fully with the CMA in its investigation.  

It is also interesting to see the CMA already making use of its powers to require redress for consumers (previously the preserve of the Courts), with such refunds being credited automatically in this case to customers via the debit or credit card used for bookings (or alternatively sent by cheque). The apparent speed of compensation for affected customers is in stark contrast to compensation for customers affected by breaches of competition law, where the CMA does not have equivalent powers to order redress and achieving effective distribution of damages in separate opt-out competition collective proceedings has proven to be a difficult issue. 

Consumer-facing businesses operating online should take careful note of this decision. The CMA has made clear that enforcement will be robust, and the financial consequences of non-compliance — including both fines and mandatory consumer refunds — can be substantial. Businesses should review their pricing practices to ensure that all mandatory fees are included in headline prices from the outset, in line with the law and the CMA's Clear Pricing guidance. To ensure compliance, we recommend that consumer-facing businesses audit their invitations to purchase  - including by conducting “test journeys” of the customer experience - and swiftly remedy any drip-pricing issues which are identified. 

Since April 2025, the CMA has launched consumer law investigations into 14 businesses across a range of sectors, including in relation to drip pricing and fake or misleading reviews. The fine imposed on the AA is the first investigation to reach a final outcome, with the other investigations still ongoing.

For further information on this or any consumer law issue, please do not hesitate to contact one of our specialists.

Our previous articles on the consumer law provisions of the DMCC Act can be found here, with further information on the digital markets and competition law aspects here.