The Competition and Markets Authority has initiated formal investigations into three major UK companies—Trainline, Virgin Atlantic, and Red Driving School—regarding concerns about pricing transparency. The regulator alleges that all three entities displayed misleadingly low initial prices to customers by not including mandatory fees upfront, a practice known as drip pricing.
Drip pricing is an illegal business practice that makes products or services appear cheaper by withholding information about compulsory charges until later in the purchasing process. The investigations focus on whether customers were adequately informed about total costs when purchasing train and coach tickets, holiday packages, or driving lessons. Emma Cochrane, the CMA’s executive director for consumer protection, emphasized that customers should see the complete price from the start to enable fair comparison shopping.
The three companies have responded to the allegations. Trainline acknowledged ongoing engagement with the CMA and stated it was taking measures to improve how certain fees are presented. The company’s stock price declined by as much as 14% in early trading following the announcement. Virgin Atlantic indicated that mandatory fees were displayed at multiple stages during the booking process but said it would review the concerns and cooperate with the regulator. Red Driving School also confirmed its commitment to transparency and engagement with the CMA.
The CMA is utilizing new consumer protection powers granted last year that allow the regulator to independently determine whether consumer laws have been violated without court involvement. If infractions are found, the authority can mandate compensation payments to affected customers and impose fines of up to 10% of a company’s global turnover. Earlier this year, the CMA ordered ticket seller StubHub to provide approximately £1.5m in customer refunds and penalties for drip pricing violations and fined the AA £4.2m while requiring it to repay over £760,000 to learner drivers.
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