The CMA flexes its new consumer protection powers

Find a lawyer Our capabilities Your career

Apr 15 2026

The regulatory landscape for UK consumer protection has entered a new phase following the CMA’s announcement today that it has fined Automobile Association Developments Limited (AA), owner of the AA and BSM Driving Schools, £4.2 million for breaches of consumer law and ordered redress of more than £760,000 to over 80,000 consumers.

The CMA’s decision follows the introduction of the Digital Markets, Competition and Consumers Act (DMCCA) in April 2025, which enhanced substantive consumer laws and granted the CMA direct powers to enforce consumer law, including the ability to impose significant financial penalties and to order enhanced consumer measures, including financial redress, without recourse to the courts.

In November 2025, the CMA launched its first wave of investigations into eight companies, relating to their online pricing practices, including drip pricing and the use of time-limited offers (see our previous blog post here). Since then, it has launched investigations into another six companies.

Today’s decision is a significant milestone, representing the first time the CMA has used its new direct powers to impose a financial penalty for a breach of consumer law and to order consumer redress. The investigation found that, between April and December 2025, the AA and BSM websites engaged in “drip pricing” by not including a mandatory £3 booking fee in the initial price displayed for driving lessons.

Key takeaways:

Impact of cooperation. The CMA reported that AA secured a 40% penalty reduction by engaging constructively with the CMA and settling the case early following an admission of wrongdoing. This is the maximum discount available under the CMA’s settlement procedure. This demonstrates the potential advantage of being prepared to move quickly and engage transparently with the regulator if an investigation is launched, but also raises significant strategic considerations regarding the admission of an infringement and waiver of certain procedural rights. What is clear is that companies under formal investigation (or pre-launch inquiries) should at the outset consider the various strategic options available – in certain cases, early and well-managed cooperation, guided by legal counsel, is important for potential reduction in financial exposure.
Significant financial risk for businesses. The scale of the penalty is significant at £4.2 million, even with the 40% discount. With the CMA empowered to impose fines of up to 10% of a company’s global turnover, companies should engage in careful review of their online pricing and marketing strategies to ensure compliance with their consumer law obligations.
Expedited timeframes. The CMA has highlighted its statutory “duty of expedition” under the new regime. This investigation – concluded within five months between its launch in November 2025 and the final decision in April 2026 – is indicative of the pace at which other CMA investigations may run.
Consumer redress. For the first time under the new regime, the CMA has used its powers to order businesses to refund consumers directly following an infringement decision. This is not a new power, but it’s one that we think the CMA will be keen to use in future consumer protection cases, as it allows it to show that its actions are benefiting consumers directly. It raises complex questions about the interplay between compensation paid to consumers via redress orders and potential claims for redress pursued by consumers in civil litigation.

Ongoing investigations

This decision is part of a wider consumer protection drive, with the CMA investigating not only pricing practices but also activity related to fake and misleading online reviews. In March 2026, the CMA announced another wave of investigations into five businesses for a range of alleged practices, including the suppression of negative reviews and the use of undisclosed incentives. These investigations are ongoing, and as yet, no findings have been made.

Conclusion

The CMA has been clear that it will act to protect consumers, and these developments underscore the CMA’s focus on tackling what it views as harmful online practices. In light of this changing landscape, businesses should ensure their sales and marketing teams are familiar with the new rules imposed by the DMCCA and the principles set out in the CMA's refreshed consumer protection guidance. With further legal requirements for consumer subscriptions on their way (see here), ensuring reg readiness for consumer-facing businesses is only likely to become more complex.

Authors

London

Apr 15 2026

Key takeaways:

Impact of cooperation. The CMA reported that AA secured a 40% penalty reduction by engaging constructively with the CMA and settling the case early following an admission of wrongdoing. This is the maximum discount available under the CMA’s settlement procedure. This demonstrates the potential advantage of being prepared to move quickly and engage transparently with the regulator if an investigation is launched, but also raises significant strategic considerations regarding the admission of an infringement and waiver of certain procedural rights. What is clear is that companies under formal investigation (or pre-launch inquiries) should at the outset consider the various strategic options available – in certain cases, early and well-managed cooperation, guided by legal counsel, is important for potential reduction in financial exposure.
Significant financial risk for businesses. The scale of the penalty is significant at £4.2 million, even with the 40% discount. With the CMA empowered to impose fines of up to 10% of a company’s global turnover, companies should engage in careful review of their online pricing and marketing strategies to ensure compliance with their consumer law obligations.
Expedited timeframes. The CMA has highlighted its statutory “duty of expedition” under the new regime. This investigation – concluded within five months between its launch in November 2025 and the final decision in April 2026 – is indicative of the pace at which other CMA investigations may run.
Consumer redress. For the first time under the new regime, the CMA has used its powers to order businesses to refund consumers directly following an infringement decision. This is not a new power, but it’s one that we think the CMA will be keen to use in future consumer protection cases, as it allows it to show that its actions are benefiting consumers directly. It raises complex questions about the interplay between compensation paid to consumers via redress orders and potential claims for redress pursued by consumers in civil litigation.

Ongoing investigations

Conclusion