The Competition and Markets Authority, the United Kingdom’s competition regulator, has initiated formal investigations into three companies—Trainline, Virgin Atlantic, and Red Driving School—over concerns regarding pricing transparency. The CMA alleges that the firms displayed artificially low headline prices while failing to disclose mandatory fees that customers would ultimately be required to pay when purchasing train and coach tickets, holidays, or driving lessons.
The investigations form part of a coordinated enforcement action targeting “drip pricing,” a practice deemed illegal under consumer protection law. Drip pricing involves presenting products or services at deceptively low initial prices while concealing compulsory charges until later stages of the purchasing process. CMA executive director Emma Cochrane stated that customers should see the total price they will pay before committing to a purchase, enabling them to make informed comparisons between different providers.
Trainline, which is publicly listed on the stock exchange, acknowledged engagement with the CMA and indicated it was taking measures to improve how certain fees are presented to customers. The company’s share price declined by as much as 14% in early trading following the announcement. Virgin Atlantic stated that mandatory fees were highlighted at multiple points during the booking process but indicated it would cooperate with the regulatory review. Red Driving School similarly committed to working with the CMA.
The investigations represent an application of consumer protection powers granted to the CMA during the previous year. These enhanced powers enable the regulator to determine independently whether consumer law violations have occurred without requiring court proceedings. Should violations be established, the CMA possesses authority to mandate customer compensation and levy fines of up to 10% of a company’s global turnover.
The enforcement action reflects an escalating regulatory focus on pricing practices. Earlier this year, the CMA ordered StubHub to reimburse approximately £1.5m to customers and imposed penalties for drip pricing violations. Additionally, the regulator fined the AA £4.2m and required restitution exceeding £760,000 to learner drivers for similar breaches.
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