EU Passenger LawLeuven

06/12/2011

Unfair commercial practices in travel

Nuria Rodríguez

Plan

1. Price of air fares1.a. Finding out final prices1.b. Some facts1.c. Our policy recommendations

2. Unfair contract terms in air transport contracts2.a. Legal framework2.b. Cases against unfair terms2.c. Our Policy recommendations

1. Price of air fares

1.a. Finding out final prices

1.b. Some facts

1.c. Our policy recommendations

1. Price of air fares1.a. Finding out final prices

How much does this ticket cost!??

All kind of extras to strugle with…

Add departure tax, airport tax, passenger service, administrative fee, payment fee, EU261 fee!…and then you’ll know how much you will really pay in the end

By the time you find out it is too late, you pay anyway… but your purchase does not reflect an informed transactional decision!

And thus this distorts competition…as comparison is made VERY difficult

Just imagine if taxes, administrative costs, shelf levies, handling and other extras were added on to your bill when you got to the supermarket till!

…1.Price of air fares1.b. Some facts

Most airlines contravene Regulation 1008/2008 (art. 23) and/or Directive EU 2005/29: latest study November 2010:- 17% of websites do not show unavoidable TFC- 29% of websites do not indicate the payment fees (avoidable?)

Endless creativity concerning extras and ancillary services (e.g; fee ckecked bagagge, fee priority boarding…): but those are only theoretically avoidable!

Why do airlines have more leeway than other traders?

Let’s hope that the practices of airlines do not spread over to other sectors!

1.Price of air fares1.c. Our policy recommendations

Improve the wording of article 23 of regulation 1008/2008: the final price should be indicated « upfront »

Establish LEGAL limitations as to what? to deem « avoidable » and « unavoidable » extras (e.g. card fees, check-in, and luggage are unavoidable for most passengers!)

Introduce a LEGAL obligation to designate enforcement bodies int he context of regulation 1008/2008

Introduce (effective) sanctions for non-compliance with Regulation 1008/2008 (recent study found that several MS have not introduced penalties)

2. The terms and conditions of transport contracts

2.a. Legal framework

2.b. Cases against unfair terms

2.c. Our Policy recommendations

2. The terms and conditions of transport contracts2.a. Legal framework

The Unfair terms directive applies…in theory to transport contracts

Yet, many terms and conditions contravene the Directive

There is no systematic enforcement of this Directive as regards the contract terms of airlines

Although lately some consumer organisations and public authorities are challenging many terms and conditions

2. The terms and conditions of transport contracts2.b. cases against unfair terms

Court decisions against unfair contract terms

Actions for injunctions from Test Achats, DECO, UFC Que Choisir, OCU:

* In Belgium 4 court decisions delivered (next slide)* In the other countries judgments are expected next year…

Other court decisions against unfair terms in Spain, Germany, Italy…

2. The terms and conditions of transport contracts …2.b. cases against unfair terms

Court judgments in Belgium (CC Namur)Injunctive actions by Test-Achats

Against Brussels airlines, Ryanair and Easyjet

The Court considered unfair clauses on:* General structure of the Terms and Conditions (Ryanar and Brussels Airlines)* Code-sharing practices (Brussels airlines) without the consent of the passenger* Cancellation of the passenger in case of force majeure forbidden (Ryanair, Easyjet)* Obligation to reconfirm return flight (Brussels Airlines)* Limitation of liability for third party services “offered” by the airline (Easy Jet).

2. The terms and conditions of transport contracts …2.b. cases against unfair terms

Other court judgments (Spain, Germany)

“No show” clause is unfair:- Commercial Court nº 2 Palma de Mallorca, 22/3/2010:- Audiencia Provincial (court of appeal) of Madrid,27/11/2009- Commercial Court of Bilbao, 7 July 2008. - Commercial Court of Bilbao, 3 July 2009.

Charging the passenger for issuing tickets via Internet: - Commercial court of Malaga, 1/09/2006- Commercial Court of Barcelona, 10/1/2011

Credit/debit card fees:- German Federal Supreme Court , 20 May 2010

2. The terms and conditions of transport contracts …2.b. cases against unfair terms

Public enforcement actions

Agencia Catalana de Consumo (Spain) against Vueling Clickair, Ryanair, Easy Jet, Transavia Airlines:- Credit card fees, pre-ticked boxes, luggage fees

L’autoria Garante Della Concorrenza E Del Mercato (Italy):

- Clause on credit card fees is unfair as misleading

Office of fair trading (UK) against credit card fees (work in process)

2. The terms and conditions of transport contracts 2.c. Our policy recommendations

Enforcement actions should be carried more systematically

A specific enforcement body should be designated in the field of unfair contract terms

The EU should establish sector specific legislation in this field: a “black list” of clauses in air transport contracts

THANKS FOR YOUR ATTENTION

More information on www.beuc.eu

EC register for interest representatives : identification number 9505781573-45