The AA hits a bump in the road with £4.2 million fine from the CMA for breaches of consumer law

The CMA’s clampdown on drip pricing under the UK’s new consumer law regime continues… 

The Competition and Markets Authority (CMA) has ordered the AA to refund more than 80,000 customers and pay a fine of £4.2 million over what it has concluded to be an illegal drip pricing regime under the Digital Markets Competition and Consumer Act (DMCCA).  

The order follows an investigation by the CMA into AA Driving School and BSM Driving School, both owned by Automobile Association Developments Limited (the AA). 

In this article, Pippa Garden, trainee solicitor and David Wozniak, associate solicitor, both in our commercial team, highlight the key lessons from the case.

The Investigation 

In November 2025, the CMA launched investigations into the online pricing practices of eight businesses as part of its aim to tackle unfair consumer practises under the DMCCA. 

Following the investigations, the CMA found that the AA had failed to show more than 80,000 learner drivers all of the costs of booking driving lessons upfront, contrary to UK consumer law. Instead, £3 booking fees had been applied to each transaction at the checkout stage. 

What is drip pricing? 

Under the DMCCA, drip pricing is an illegal practice where consumers are misled into selecting a service or product due to its low price, only to later find that the price has increased at checkout due to mandatory additional fees. 

The DMCCA came into force in April 2025, significantly strengthening the UK's consumer protection regime. The DMCCA allows the CMA to investigate suspected breaches of consumer law and take action against businesses that fail to comply. One area that the CMA have been keen to focus on is online price transparency. 

Under the DMCCA, drip pricing is expressly prohibited. Businesses that provide goods and services to consumers must ensure that all mandatory fees are clearly stated at the outset of a transaction (including charges, taxes, and fees). It's illegal for a business to charge additional fees at a later stage of the booking process if they were not disclosed initially. 

Sarah Cardell, Chief Executive of the CMA, has confirmed this approach, stating that “If a fee is mandatory, the law is clear: it must be included in the price from the very start – not added at checkout – so consumers always know what they need to pay”. 

Consequences of the investigation 

As a result of the CMA’s investigation, the AA were ordered to refund all customers who had been affected by the illegal drip pricing regime (the cost of which is expected to be in the region of £760,000) and pay a fine of £4.2 million for breaking consumer laws. 

Whilst the total cost to the AA is significant, it is 40% less than the CMA initially indicated as being owed, due to the fact that the AA engaged constructively with the investigation and admitted to having broken the law at an early stage. 

Practical implications  

The AA enforcement action shows that the CMA is prepared to impose significant fines and mandatory refunds against non-compliant businesses. 

All businesses that sell to consumers (particularly online) should properly review their online pricing practices to ensure that they are fully transparent and compliant with UK consumer laws. If mandatory fees or charges are included in the total price, these must be made clear to consumers at the outset of a transaction. 

At a minimum, the CMA expects businesses to: 

• show the total price upfront;
• include all mandatory charges; and
• clearly explain how customers can calculate the total price, where this cannot be given in advance. 

If you need advice on how to make your online pricing practices UK consumer law-compliant, or if you would like more information on consumer law more generally, please contact David Wozniak on [email protected] or 0191 2117831.