In the first of what will apparently be many such initiatives, the European Commission has conducted an EU-wide “sweep” of airline websites looking for unfair and misleading practices. High levels of non compliance were revealed as Omar Bucchioni reports.
Topic: Misleading advertising
Who: The European Commission and national enforcement authorities in Austria, Belgium, Bulgaria, Cyprus, Denmark, Estonia, Finland, France, Greece, Italy, Lithuania, Malta, Portugal, Spain, Sweden and Norway
When: September 2007
Where: Across the EU and beyond
Law stated as at: 2 January 2008
More than 200 websites of Europe’s leading airlines, low cost carriers as well as other website selling airline tickets have been found in breach of EU consumer laws rights following a cross-border “Sweep” or investigation of over 400 websites co-ordinated by the European Commission and carried out by 15 EU national authorities as well as Norway.
The results of the investigation were announced by the EU Consumer Affairs Commissioner Meglena Kuneva in Brussels on 14th November 2007. It was the first ever EU joint enforcement action (“Sweep”) against misleading advertising and unfair practices targeting consumers. The so called “Sweep” is a systematic check carried out simultaneously and in a co-ordinated way in different Member States to investigate breaches of consumer protection law.
The airline ticket selling investigation took place during the week 24-28 September 2007. National enforcement authorities in Austria, Belgium, Bulgaria, Cyprus, Denmark, Estonia, Finland, France, Greece, Italy, Lithuania, Malta, Portugal, Spain, Sweden and also Norway, examined the target websites using a common methodology and pre-defined search terms such as “air-ticket, cheap flight, travel, last minute, air miles, fly cheap”.
To make the check most effective, authorities focused on 3 problem areas:
- Clear Pricing: (Biggest problem, with 12 countries reporting it as a main finding) A clear indication of the total price should be given in the headline price first advertised on a website (i.e. additional charges such as taxes, booking or credit card fees should be clearly indicated from the start rather than added at a later stage of the booking process).
- Availability of offers: (8 countries reporting it as a main finding) Any condition of the offer, particularly limitations on the availability of an offer, should be clearly indicated. Prices and special offers are often used to lure consumers into the process of booking a flight while in reality there are only a very limited number of seats available under the advertised offer.
- Fair Contract terms: (8 countries reporting it as a main finding) General Contract terms must be clearly indicated, easily accessible and fair. Unfair practices included mandatory insurance attached to an offer, or where consumers have to explicitly opt-out of an insurance clause, rather than opt-in. Contract Ts&Cs must be available in the language of the consumer.
Other common malpractices
With over 50% of checked sites failing to comply, there were many other types of breach. Ms Kuneva during her speech gave the following examples:
Tickets that are advertised as free, but the total price is not in fact free once you add in different taxes and charges;
- Flight tickets advertised at €20 on the first page, but by the time all the mandatory taxes, fees, landed charges and charges were added in – 5 web pages later – the total price was over €100;
- Tickets advertised at low or lowest prices for which no flights could be booked;
- Contract terms only available in foreign languages;
- Additional services like insurance automatically added on where consumers should always be free to choose
The sweep procedure is followed by an enforcement phase when companies are contacted by authorities and asked to correct websites and clarify their position. This is the reason why, at this stage, the names of the websites are kept confidential. Failure to take appropriate action to bring the site in line with EU law could put site operators at risk of having their name revealed to the public as well as facing legal action leading to fines or closure of their websites. This task will be left to the national authorities for individual cases; yet, where a trader operates from another country, national enforcers will be able to request assistance from colleagues in other EU authorities via the Consumer Protection Co-operation Network (CPC) .
The situation is more complex when an airline operates from outside the EU and advertises inside the EU. Despite EU law applies, its enforcement can potentially be very difficult. In this regard, the International Organisation of enforcement authorities (ICPEN), which includes 36 Members (including 24 EU Member States) may participate and conduct sweeps as part of their activities. The situation can potentially be even more complex in relation to contract terms where international conventions can come into play. In this area, legal advice is strongly recommended due to its complexity.
Why this matters:
The first Sweep was carried out to check website selling airline tickets because airline ticket and passenger complaints are two of the leading areas for complaints coming into the European Consumer Centres (ECC) . At last three more Sweeps are planned for 2008. Interestingly enough some Member states did not take part in this cross border check, including the authorities in the UK and Germany. The reasons were varied – due to resources, timing or other constraints – but it is possible that more Member States will play a part in future Sweeps.
An important point to bear in mind is that many airlines as well as booking operators do business in several countries and breaches may be found in one language version and not in another.
Common EU air transport operation rules mooted
The EC’s Directorate-General for Energy and Transport, based in Brussels, has already issued a proposal for a Regulation imposing common rules for the operation of air transport services in the Community, the so called “Third Package in Air Transport”. Ms Kuneva has already hailed this as particularly welcome and very timely. The Regulation will further clarify that final prices quoted include all applicable fares, charges, surcharges, taxes and fees which are unavoidable and foreseeable at the time they are published. These rules will also apply to fares and rates published on the Internet. It will apply to all flights within the EU and to flights of all companies departing from an EU airport.
The European Commissioner Meglena Kuneva has already launched her admonition: “I am issuing the strongest possible warning to companies to take swift action to put their house in order. Once that deadline expires I will not hesitate to name and shame companies where further legal action is required because they still insist on breaking the law”.
It seems like this is the right time to check your website before it gets checked!