The Competition and Markets Authority (CMA) has launched an investigation into Trainline over concerns that mandatory fees were not included in the upfront prices displayed to customers booking train and coach tickets through its website and app.

The investigations are part of a wider CMA clampdown on misleading pricing practices, including where mandatory charges are separated from the headline price, or added later in the buying process, known as drip pricing.

The CMA said it had observed mandatory fees of between 59 pence and £2.79 on train bookings, while coach bookings carried a £1.50 booking fee.

Trainline shares fell around 13% in early trading following news of the investigation, with investors concerned over potential refunds, fines and changes to the company's pricing model.

In May, Trainline saw its operating profit jump by 43% to £122m in the year to 28 February, reflecting high earnings and lower share-based payments charge. The FTSE 250 digital rail and coach technology platform also saw net ticket sales jump by £6.3bn, while its revenue increased by 2% to £453m.

The regulator is also investigating Virgin Atlantic over mandatory resort fees and local taxes on package holidays, and RED Driving School over booking and digital fees of more than £7 per booking.

The CMA can impose fines of up to 10% of global turnover and order compensation for affected customers if it ultimately finds that consumer law has been breached.

CMA executive director for consumer protection Emma Cochrane said: "At a time when many households are watching every pound they spend, it is important that people are not surprised by extra fees when booking train and coach tickets, holidays or driving lessons. Unexpected mandatory charges make this much harder, which is why the CMA initially put these firms on notice over concerns about their pricing practices and is now opening formal investigations."

The regulator added that the investigation is at an early stage and that it has reached no conclusion that Trainline or the other companies have broken the law. All three firms had previously received advisory letters from the regulator warning them about their pricing practices.

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