According to government research from 2023, external, almost half of online businesses it sampled used hidden or dripped fees.
Business Secretary Peter Kyle said consumers “should never be caught out by unclear pricing”.
He said: “I welcome the CMA’s tough action today to enforce the law and make sure businesses play fair.”
Since April last year, the CMA has been carrying out a major review to see if hundreds of businesses are complying with price transparency rules.
In November, it said it was writing to 100 businesses outlining concerns about their use of extra fees and online sales tactics.
It also launched an investigation into eight businesses including AA Driving School and BSM Driving School, under the new Digital Markets, Competition and Consumers Act 2024.
This gave the watchdog new powers to decide if consumer laws had been broken rather than having to go through the courts. The CMA’s action against the AA is the the first penalty it has imposed under the new enforcement powers.
Katrina Anderson, principal associate at national law firm, Mills & Reeve, said the CMA’s strengthened powers are “materially raising the stakes for businesses that fall short of consumer law”.
She added: “At a time when trust and loyalty are central to commercial growth, businesses cannot afford to get this wrong.
“The consequences go well beyond fines and customer refunds; the reputational damage can be just as significant.”
Rocio Concha, director of policy and advocacy at Which?, which has campaigned against drip pricing, said: “This must be the start of a wider crackdown, and the regulator should continue to use its new powers to send a clear message to businesses that they will not get away with using illegal pricing tactics.”