The Competition and Markets Authority (CMA) is on-message with Andy Burnham’s declaration of war on the small – and sometimes not-so-small – hassles and expenses of everyday consumer life created by companies’ underhand and misleading pricing tactics. Trainline, Virgin Atlantic and Red Driving School found themselves under investigation on Wednesday for various forms of alleged “drip pricing” – not being upfront about mandatory add-on charges, in other words.
The prime minister had nothing to do with the CMA’s pursuit, it should be said. The watchdog’s “consumer protection drive” pre-dates his arrival and was encouraged by legislation under the last Tory government – the Digital Markets, Competition and Consumers Act of 2024, which gave the regulator “direct enforcement” powers, meaning it no longer had to go to court under consumer protection laws. And it is using those powers: eight cases were opened last November and driving schools AA and BSM plus the ticketing site StubHub UK have already been fined.
This is very welcome. Putting a few household names in the spotlight sends a usefully strong message. By way of boosting that signal, shares in Trainline, the only quoted company on Wednesday’s list, plunged by 14%.
It’s merely an investigation at this stage, so one can’t draw conclusions, but there was a curious line in Trainline’s statement. “Trainline has proactively engaged with the CMA over several months and is taking steps to enhance the presentation of certain fees,” it said.
The obvious question is why, if the regulator has been on the warpath for months, Trainline didn’t just give it everything it wanted on day one. Regular users of the slick app know there can be a fee at the end of the booking process (for about 30% of journeys), so they are unlikely to be deterred by a message to that effect displayed prominently at the outset.
There may be complicating details. Trainline adds its value for consumers by navigating the hellishly complicated fare structures on Britain’s railways by, for example, identifying so-called “split tickets” (multiple tickets covering legs of a single journey) or cases where an obscure railcard will almost pay for itself. If Trainline’s fee depends on the type of ticket, perhaps it’s not possible to state the fee precisely until the punter has chosen.
But such dry technicalities were, presumably, mentioned in the months of engagement with the CMA. So it would be fair for Trainline shareholders to ask how this affair has even reached the stage of a formal investigation by a regulator with the power to order refunds and fine 10% of turnover. It’s not as if large sums are involved – the CMA said it observed transactions with additional fees ranging from 50p to £2.79.
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To repeat, no wrongdoing has been found. But the investigation comes at a bad moment as Trainline waits to see if the state, in the form of the new Great British Railways, gets round to launching a rival fee-free ticketing app. A regulatory quarrel over transparency is the last thing it needs.
