Out-Law News 2 min. read
20 Jul 2012, 2:08 pm
The Court said that businesses cannot automatically add flight cancellation insurance into online flight prices and that the insurance product should only be sold to consumers who actively choose it.
The ECJ said in its judgment that under EU law the insurance charge was an 'optional price supplement' that should not be automatically imposed.
Under the EU's Regulation on common rules for the operation of air services in the EU companies selling air tickets to the public must display "the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication".
A breakdown of the "final price" must include at least the cost of the air fare or air rate and, in addition, any "taxes; airport charges; and other charges, surcharges or fees, such as those related to security or fuel" where those items have been added to the air fare or air rate cost.
The Regulation also stipulates that any "optional price supplements" must be "communicated in a clear, transparent and unambiguous way at the start of any booking process" and that they can only be accepted by consumers "on an 'opt-in' basis."
The ECJ was ruling in a case referred to it from a regional court in Germany. In the case before the Cologne court German consumer rights groups challenged whether ebookers.com could legitimately automatically package flight cancellation insurance together with the cost of booking an air fare through its website. Consumers buying the flight tickets through ebookers.com had to actively opt out from buying the insurance if they did not want it.
The ECJ said that just because ebookers.com was not an air carrier did not mean the EU laws did not apply to it. It said that there was a wider question of consumer rights at issue than a narrow reading of just the EU's air services Regulation in the case, and that the EU's new Consumer Rights Directive requires that prior consent must be obtained from consumers before traders levy any extra charges on sales transactions.
"[The] specific requirement in relation optional price supplements, within the meaning of the ... Regulation [on air travel], is designed to prevent a customer of air services from being induced, during the process of booking a flight, to purchase services additional to the flight proper which are not unavoidable and necessary for the purposes of that flight, unless he chooses expressly to purchase those additional services and to pay the corresponding price supplement," the ECJ said.
"The requirement in question corresponds, moreover, to the general requirement concerning consumer rights in the sphere of additional payments, laid down in [an article of the Consumer Rights Directive]. In accordance with that provision, before the consumer is bound by an offer, the trader must seek his express consent to any extra payment in addition to the remuneration agreed upon for the trader's main contractual obligation, and that consent cannot be inferred by the trader by using default options which the consumer is required to reject in order to avoid the additional payment," it said.
"In that connection ... it would be at odds with the purpose of protecting a customer for air services ... if that protection were to depend on whether the optional additional service, connected with the flight itself, and the corresponding price supplement offered during the process of booking that flight originate from an air carrier or from another party which is legally and economically separate from it," the ECJ added.
"If it were permissible to make that protection dependent on the status of the provider of that additional service, by granting protection only where the service was provided by an air carrier, that protection could easily be circumvented and, consequently, the objective in question certainly compromised. In any event, such a procedure would be incompatible with [the Consumer Rights Directive]," the Court ruled.