On 14 May, the European Commission published the results of an 18 month investigation into the sale of airline tickets online (found here and here).The Commission coordinated the pan-European exercise with 16 European national authorities, who together checked over 400 websites selling airline tickets for compliance with European consumer protection laws.
This is the first such “sweep” investigation to be carried out by the Commission which does not have direct enforcement powers in relation to consumer protection legislation. However, by coordinating the investigation with national enforcement authorities, and by threatening to “name and shame” defaulting airlines, the Commission has, for the first time, used its powers of persuasion to take indirect enforcement action on consumer protection issues. Judging by its success it likely will not be the last.
In September 2007, the Commission launched a “Sweep” or systemic checks of websites selling airline tickets by EU Member States.The Sweep focused on three key practices: clear pricing of tickets (i.e. any additional charges such as taxes should be displayed with the headline ticket price); availability of fare (i.e. any limitations to the availability of an offer should be clearly indicated); and fair contract terms. Of the 447 websites checked during the Sweep, over 50% were found to have “irregularities”. Following the Sweep, those websites that were found not to “fully respect” consumer protection laws were contacted by the relevant national authority and asked to provide clarification on their actions, or change their practices. The Commission issued a ‘mid-term’ report in April 2008 indicating that 50% of the websites that had been identified as having irregularities in September 2007 had corrected their practices. The final report explains that enforcement action - leading to the websites correcting their practices - has now been completed in 85% of cases, but there remains a hardcore group of about a dozen companies who are still giving the Commission “real cause for concern”.
This is undoubtedly an important step in European consumer protection. This investigation is the first time that the Commission has used the Sweep enforcement action to coordinate a consumer protection investigation. There are a number of European Regulations governing consumer protection for example, the Regulation on misleading advertising and the Regulation on unfair terms in consumer contracts. These pieces of European legislation are transposed into national laws and enforced at national level. It is therefore national authorities that impose sanctions against companies found to be in breach of consumer protection law, not the European Commission.
In June of this year, the Commission plans to publish an ‘Enforcement Communication’ aimed at strengthening pan-European enforcement of consumer protection laws. In addition, the Commission also hopes to put in place an industry wide agreement to uphold standards and conduct another Sweep later this year. It appears that the Commission is determined in its fight for consumer protection - and websites selling airline tickets are only the start of the Commission’s crusade.
- Sue Hinchliffe and Mark Gardner
