In brief: The Competition and Markets Authority issued its first-ever financial penalty under the Digital Markets, Competition and Consumers Act 2024 in April 2026, fining AA Driving School and BSM Driving School £4.2 million and ordering over £760,000 in customer refunds for “drip pricing,” hiding a mandatory fee until late in the checkout process. Separately, the government’s new subscription contracts regime, which will require clearer disclosure and easier cancellation, has been delayed again to Spring 2027.
Both developments point the same direction for online retailers: checkout pricing transparency is now an active enforcement priority, not a theoretical compliance risk, even while some of the more detailed subscription-specific rules still have time before they bite.
Ecommerce regulation update coverage in 2026 has been dominated by two developments in regulation and compliance that share a common thread: how clearly a retailer discloses what a customer will actually pay. The Competition and Markets Authority has demonstrated, with a real fine, that it will act on pricing transparency now rather than waiting for further legislation. At the same time, the more detailed rules on subscription contracts specifically have been pushed further into the future, which changes the urgency but not the direction of travel for any retailer running a subscription model.
The CMA Issued Its First-Ever Fine for Drip Pricing
On 15 April 2026, the CMA concluded its investigation into AA Driving School and BSM Driving School, both owned by the Automobile Association, finding that more than 80,000 customers booking driving lessons online between April and December 2025 were not shown the full price upfront. A mandatory £3 booking fee was instead added later in the online purchase journey, a practice the CMA classifies as unlawful drip pricing under the Digital Markets, Competition and Consumers Act 2024.
The CMA ordered the AA to refund over £760,000 to affected customers and imposed a £4.2 million fine, reduced by 40% from an initial £7 million penalty after the AA admitted the breach and settled early, the maximum discount available under the CMA’s settlement process.
This was the CMA’s first use of its new direct enforcement powers to impose both a financial penalty and mandatory consumer refunds for a substantive consumer law breach, and it landed only five months after the investigation was opened. The case was one of eight the CMA opened in November 2025 as part of a wider “major consumer protection drive” targeting drip pricing and related online pricing tactics, alongside advisory letters sent to 100 firms and new price transparency guidance. Further investigations into suspected fake and misleading reviews, and into early cancellation fees, were also opened in March 2026 and remain ongoing.
What Drip Pricing Enforcement Means for Ecommerce Checkout Design
The AA case wasn’t about driving lessons specifically; it was about a mandatory fee that wasn’t disclosed in the headline price a customer sees before starting the purchase journey. That’s directly relevant to any ecommerce checkout that adds fees, service charges, or delivery surcharges only after a customer has begun the buying process rather than showing the full price from the outset. The CMA’s own commentary on the case framed drip pricing as something that “tips the balance” for consumers watching every pound, and made clear this is a priority enforcement area with further cases expected.
The practical test the CMA applied is whether a fee is genuinely optional or effectively mandatory for most customers to complete their purchase. A retailer whose checkout adds a delivery charge visible before payment is in a different position to one that presents an artificially low headline price and adds a mandatory processing or service fee only at the final payment step. Reviewing where in the checkout journey any mandatory fees first appear, and whether the initial advertised price reflects what most customers will actually pay, is now a concrete compliance exercise rather than a general best-practice suggestion.
Common Ecommerce Fee Patterns Worth Reviewing Against This Test
A few checkout patterns are worth checking specifically against the standard the AA case set. A “service fee” or “handling fee” that applies to effectively every order, rather than to a genuinely optional add-on, sits closest to the AA’s mandatory booking fee, since the customer has no realistic way to avoid it while still completing the purchase. A delivery charge that only becomes visible after a customer has entered their address and moved further into checkout is more exposed than one shown against the product price or at the very start of the buying journey, even if the charge itself is legitimate and calculated fairly.
Currency conversion fees, payment surcharges tied to a specific payment method, and packaging or “eco” charges applied to all orders regardless of packaging choice all sit in similar territory if they aren’t disclosed until late in the journey. The distinguishing factor the CMA is applying isn’t whether a fee is reasonable in size, the AA’s fee was only £3, but whether the customer could see the full price they would actually pay before committing significant time to the purchase journey. A genuinely optional fee, such as expedited shipping a customer actively chooses, sits on the other side of that line, since the customer retains a real choice not to pay it.
The New Subscription Contracts Regime Is Delayed to Spring 2027
Separately from drip pricing enforcement, the government published its response to the consultation on the DMCCA’s new subscription contracts regime on 2 April 2026, confirming that implementation is delayed to Spring 2027, a further push back from the previously indicated Autumn 2026 timeline, which was itself already later than the original “not before Spring 2026” target.
When the regime does commence, it will require retailers offering subscription contracts, defined as arrangements that automatically recur or that auto-renew from a free or discounted trial into a paid rate, to give consumers clear “key pre-contract information” with strict presentation requirements, send reminders ahead of subscription renewals, and ensure cancellation can happen in a way that is genuinely straightforward rather than requiring unnecessary steps.
The regime applies regardless of where a trader is based if they offer subscriptions to UK consumers, and regardless of where a UK-based trader’s customers are located, so the delay doesn’t narrow which businesses will eventually be caught by the rules. Most of the DMCCA’s other consumer law provisions, including the drip pricing rules behind the AA case, have already been in force since April 2025, so the subscription-specific delay applies narrowly to that part of the Act rather than signalling a broader pause in enforcement.
What UK Retailers Should Do Now Despite the Delay
The subscription regime’s delay to Spring 2027 gives retailers real planning time, but the CMA’s enforcement pattern elsewhere suggests that time is better spent preparing than waiting. Any retailer running a subscription or auto-renewing offer should start reviewing cancellation flows now, since the eventual requirement for cancellation to be “straightforward” is unlikely to be satisfied by a process that currently requires a phone call or multiple account settings changes, and CRM and billing systems that need to send renewal reminders on a schedule can take longer to modify than the headline delay might suggest.
On drip pricing specifically, there’s no delay to plan around. The relevant rules have been in force since April 2025 and the CMA has now shown it will fine and order refunds under them, so reviewing checkout flows for any fee that appears only after a customer has started the purchase journey is worth doing immediately rather than treating it as a future compliance project. This is a lower-effort check than the subscription regime, since it’s mainly a question of checkout sequencing and pricing display rather than new systems or contractual terms.
FAQs
What did the CMA actually fine the AA for? Drip pricing, specifically failing to include a mandatory £3 booking fee in the headline price shown to more than 80,000 customers booking driving lessons online, with the fee only appearing later in the purchase journey.
Is drip pricing enforcement only relevant to driving schools? No. The CMA’s case against the AA is being treated as a template for online pricing practices generally, and the regulator has opened further investigations into fake reviews and early cancellation fees as part of the same enforcement drive.
Which ecommerce checkout fees are most at risk under this ruling? Fees applied to effectively every order, such as service or handling charges, and fees that only become visible late in checkout, such as processing or eco charges introduced after address entry, sit closest to the pattern the CMA penalised. A fee the customer can genuinely choose to avoid, like optional expedited shipping, is on safer ground.
When does the new subscription contracts regime take effect? Spring 2027, according to the government’s April 2026 consultation response. This is a further delay from the previously expected Autumn 2026 date.
Does the subscription regime delay mean retailers can wait to review their practices? Not entirely. Drip pricing rules are already in force and being actively enforced, so checkout pricing display is worth reviewing now. The subscription-specific rules have more lead time, but cancellation flows and CRM systems often take longer to change than expected, so early preparation is still worthwhile.
