The Competition and Markets Authority has initiated formal investigations into three major companies—Trainline, Virgin Atlantic, and Red Driving School—over concerns regarding pricing practices that fail to disclose mandatory charges upfront. The probe centers on allegations that the firms displayed initial prices that did not reflect the total cost customers would ultimately pay, a practice known as drip pricing.
The CMA described the investigations as part of a targeted enforcement effort against drip pricing, which remains prohibited under consumer protection law. According to Emma Cochrane, the executive director for consumer protection at the CMA, the first price shown to customers should represent the actual amount they will pay. The regulator emphasized that transparent pricing enables consumers to make informed purchasing decisions by facilitating straightforward price comparisons across options.
The three companies have responded to the action. Trainline stated it had been cooperating with the CMA for several months and was implementing measures to improve how certain fees are presented to customers. The announcement resulted in a significant market reaction, with Trainline’s share price declining by as much as 14% during early trading. Virgin Atlantic indicated that mandatory fees were referenced at multiple stages during the booking process and confirmed it would review the concerns while working with regulators. Red Driving School expressed its commitment to customer transparency and said it was engaging with the CMA.
The investigations leverage consumer protection powers that were granted to the CMA recently. Under this framework, the regulator can determine independently whether consumer law violations have occurred without requiring court intervention. If violations are found, the CMA possesses authority to require businesses to compensate affected customers and impose fines reaching up to 10% of global turnover.
This action aligns with recent CMA enforcement activity addressing similar concerns. Earlier this year, the regulator ordered StubHub to refund customers nearly £1.5m and levied penalties for drip pricing violations. Additionally, the CMA fined the AA £4.2m and directed it to repay more than £760,000 to learner drivers for comparable infractions.
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