EU Passenger Law Leuven 06/12/2011 Unfair commercial practices in travel Nuria Rodríguez

Plan 1.Price of air fares 1.a. Finding out final prices 1.b. Some facts 1.c. Our policy recommendations 2.Unfair contract terms in air transport contracts 2.a. Legal framework 2.b. Cases against unfair terms 2.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 fares 1.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 fares 1.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 fares 1.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 contracts 2.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 contracts 2.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/ Commercial Court of Bilbao, 7 July Commercial Court of Bilbao, 3 July  Charging the passenger for issuing tickets via Internet: - Commercial court of Malaga, 1/09/ 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

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