CMA Investigates Trainline, Virgin Atlantic and Red Driving School

The Competition and Markets Authority launched formal investigations on Wednesday into Trainline, Virgin Atlantic, and Red Driving School over allegations of drip pricing. This illegal practice involves displaying low headline prices and adding mandatory fees later in the purchasing process. The regulator is specifically examining Trainline's booking fees for train and coach tickets, Virgin Atlantic's resort fees and local taxes for package holidays, and Red Driving School's booking and digital fees for driving lessons. Observed fees ranged from 50p to £2.79.

Utilizing powers granted by the Digital Markets, Competition and Consumers Act of 2024, the regulator can now order customer compensation and fine companies up to 10% of their global turnover without court intervention. This enforcement drive follows government commitments from Prime Minister Andy Burnham to eliminate rip-off business practices. The CMA has previously fined other entities, including StubHub UK, AA, and BSM, for similar practices.

Trainline shares fell approximately 14% to 15% following the announcement. Trainline stated it has engaged with the regulator for several months and is taking steps to enhance the presentation of certain fees. Virgin Atlantic stated it takes its responsibility to customers seriously to ensure they make informed decisions. All three companies have indicated they are cooperating with the investigation.