CMA investigates Trainline, Virgin Atlantic and Red Driving School

In short

Britain's competition watchdog opened drip pricing investigations into Trainline, Virgin Atlantic and Red Driving School. Trainline's shares promptly came off the rails, dropping 14%.

What's going on

• The Competition and Markets Authority, the UK's competition and consumer regulator, is investigating Trainline, Virgin Atlantic and Red Driving School over how they display prices.
• Drip pricing means the advertised price leaves out compulsory fees, which appear later in the booking, so the real total only becomes clear at the end.
• The regulator says the practice also distorts competition, because a seller hiding part of its price looks cheaper than a rival showing everything.
• It ordered ticket site StubHub to pay close to £1.5mn in refunds and penalties in June, and can fine up to 10% of global turnover for an infringement.
• All three companies say they are cooperating; Trainline is already changing how some fees are shown.

How does this impact law firms?