From a slap on the wrist to multi‑million pound penalty: Why the CMA’s AA decision changes everything

The Competition and Markets Authority ("CMA") has recently imposed its first monetary penalty for breach of consumer law, following implementation of the new price dripping prohibition under the Digital Markets, Competition and Consumers Act 2024 ("DMCCA"). (It has previously imposed a penalty on Euro Car Parks for failure to comply with a request for information.)

On 15 April 2026, the CMA imposed a penalty on the AA of £4.2 million for illegal drip pricing and ordered the AA-owned driving schools to refund booking fees, which had not been included in the advertised upfront price. The penalty is more than a regulatory headline. It marks a significant moment in the enforcement of UK consumer protection law, demonstrating the CMA's willingness to deploy its new powers established under the DMCCA and serves as a clear warning to businesses that pricing failures are no longer a matter for the Advertising Standards Authority ("ASA") alone.

The facts (and the fine*)

Between April and December 2025, customers booking driving lessons with AA Driving School and BSM Driving School were advertised an initial price, which excluded a mandatory £3 booking fee. The mandatory fee was only revealed later in the booking journey.

The CMA's investigation concluded that more than 80,000 customers were affected by the illegal drip pricing. A finding with stark consequences for the AA, with:

• a £4.2 million civil monetary penalty (*not a fine, that’s for the Court);
• over £760,000 in compulsory customer refunds;
• a reputational impact for the organisation, as the first to be publicly fined under the CMA's consumer enforcement regime; and
• the administrative burden of refunding nearly 80,000 customers.

A high price to pay for a £3 booking fee.

The discount for early acceptance

Perhaps the most significant aspect of the CMA's decision, is the £4.2 million penalty was calculated after the maximum available discount for early acceptance of the breach.

By way of a brief summary, the CMA's published enforcement timetable illustrated how the process runs in practice.

1. Investigation opened: The CMA opens a formal investigation (in this instance, November 2025) and begins information gathering, typically, by information notices.
2. Evidence gathered: The business in question is to respond to the information notices issued and can engage with the CMA. No infringement needs to be found at this stage.
3. Settlement window opens: At this stage an organisation can admit breach (based on the information and CMA engagement), accept liability, agree not to contest the CMA's findings and cooperate to streamline the procedure.
4. Provisional Infringement Notice (PIN): The CMA issues a PIN. Once issued, the opportunity for discounts sharply reduces.
5. Final Infringement Notice and penalty (FIN).

The AA settled before the CMA issued a PIN, thereby qualifying for a 40% reduction (being the highest discount the CMA offers under the settlement policy). Had the AA not settled at this point, or chose to contest/appeal against the CMA, they could have been looking at a £7 million penalty, as a starting point before customer refunds.

From ad compliance to enforcement with teeth

This investigation is the first financial penalty imposed by the CMA for a substantive breach using its direct consumer enforcement powers under the DMCCA. Since April 2025, the CMA no longer needs to escalate matters to the courts to establish breaches of consumer law. It can investigate, decide liability, impose fines of up to 10% of global turnover or £300,000, whichever is higher, and order consumer redress.

Consumer protection is now placed on the same footing as competition law, and the AA decision shows that the CMA has no intention of leaving its enhanced powers unused. For many years, pricing errors were treated primarily as a matter for the ASA. Whilst the ASA’s ability to issue rulings and require the withdrawal of misleading advertisements remains intact, reputational embarrassment is a far cry from a formal investigation culminating in a finding of legal infringement. The two regimes carry profoundly different consequences.

As the AA case shows, the CMA is not limiting investigations to egregious or deliberate misconduct. On the facts, this was a small, clearly disclosed booking fee, presented badly. Under the new regime, that is sufficient to trigger an investigation, publish infringement findings, and impose penalties in the millions.

Looking ahead

Drip pricing is a clear enforcement priority for the CMA. Businesses may wish to:

• Map real customer journeys end-to-end, rather than merely reviewing advertisements and headline prices;
• Stress-test pricing transparency, particularly where fees, add-ons or charges appear later in the purchasing process;
• Dedicate resource and place clear ownership around CMA risk; and
• Plan for CMA enforcement, by way of a strategy to engage early and, if necessary, settle early.

Fundamentally, businesses must reset their assumptions about pricing errors. The question is no longer whether an ad is defensible, but whether underlying commercial practices can withstand scrutiny from a regulator with both the power and the appetite to enforce.

The full CMA press release can be found here.