The Competition and Markets Authority has initiated formal investigations into three major companies—Trainline, Virgin Atlantic, and Red Driving School—on suspicion of engaging in drip pricing practices that obscure the true cost of products and services to consumers.
Drip pricing is an illegal practice in which businesses present artificially low prices by withholding mandatory fees from the initial display, making products appear cheaper than they actually are. The CMA expressed concern that customers of these companies were not provided with complete pricing information upfront when purchasing train and coach tickets, airline holidays, or driving lessons. Emma Cochrane, the executive director for consumer protection at the CMA, emphasized that consumers deserve transparency, stating that the first price shown should reflect the final amount paid and that hidden charges undermine customers’ ability to make informed purchasing decisions.
Trainline disclosed to the stock exchange that it had been cooperating with regulators for several months and was implementing measures to improve how certain fees are presented to customers. The company’s share price dropped as much as 14 percent following the announcement. Virgin Atlantic stated that mandatory fees were displayed at multiple stages during the booking process but pledged to review the concerns and cooperate fully with the investigation. Red Driving School similarly affirmed its commitment to customer transparency and indicated it would engage constructively with the regulator.
These investigations operate under consumer protection powers granted to the CMA last year, which grant the agency direct authority to determine whether consumer law violations have occurred without requiring court proceedings. If violations are substantiated, the regulator can mandate customer compensation and levy fines reaching up to 10 percent of a company’s global turnover. Earlier this year, the CMA ordered comparable action against other businesses, requiring StubHub to provide nearly £1.5 million in refunds and penalties and fining the AA £4.2 million while requiring over £760,000 in repayments to learner drivers for similar drip pricing violations.
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