EU cracks down on 'misleading' airline ticket advertising
Airlines have four months to remove misleading information on flight prices and conditions from their internet pages, said EU Consumer Protection Commissioner Meglena Kuneva, after an investigation revealed that more than half of the over 400 websites inspected were deceptive.
More than 200 European airline websites are misleading consumers by failing to clearly advertise the full prices and conditions of their flight offers, Consumer Protection Commissioner Meglena Kuneva said on 14 November.
Presenting the results of an EU-wide investigation into misleading advertising and unfair practices on airline ticket-selling websites – the first ever EU joint enforcement action – the Commissioner said companies that presented irregularities would have four months to clear up the situation.
The Commission declined to mention any names at this point in time, but Kuneva stressed that, if companies failed to correct their website before the deadline expires, they could face legal action, fines or even the closure of their websites. She added that she would "not hesitate to go further and name and shame companies which are still breaking the law".
A total of 447 websites were checked by national authorities in 15 member states, as well as Norway.
The worst offender turned out to be Belgium, where 46 of the 48 checked websites presented "irregularities" relating to price indications, contract terms and clarity of proposed conditions. Austria was the best performer, with none of the 20 websites that were inspected judged to be misleading.
The initiative highlights a particular problem in the airline sector, where price competition is so strong that carriers – and in particular low-cost operators, such as Ryanair – regularly advertise very cheap or even 'free' flights, despite the fact that they are in fact subject to taxes and charges ranging from €15 to €35.
This problem has also been picked up in Commission proposals to modernise 15-year-old rules governing the aviation market, in order to increase air-fare transparency and make it easier for consumers to compare prices offered by different airline companies (EurActiv 19/07/06).
The proposal, which was backed by MEPs in July 2007 (EurActiv 12/07/07), would specifically require that air fares be advertised only in a way that includes all fares, taxes and charges, as well as a detailed breakdown of those prices.
Under the EU's Unfair Commercial Practices Directive, companies are obliged to give consumers the clear information they need – including the main characteristics of the product, the price, "right of withdrawal", etc. – in order to make "an informed choice".
"Consumer rights are no good if they are just on paper - they have to be enforced on the ground," said EU Consumer Affairs Commissioner Meglena Kuneva, adding that EU citizens "deserve clear and fair pricing and no hidden surprises in the small print of contract terms."
The European consumer organisation BEUC welcomed the Commission's "pro-active approach" to enforcing EU consumer law, saying that many airline practices were "clearly abusive": "Air fares are too often advertised in a way that is misleading, and that makes comparisons difficult, thereby limiting competition and consumer choice," stated the group.
"We hope this will be the first of many such initiatives," said BEUC Director Jim Murray.
But Irish MEP Jim Higgins (EPP-ED) said the Commission had not gone far enough and should publish the list of websites that have been found to be misleading now rather than allowing them four months to rectify their pricing policy.
"The websites were given clear warning that they would be penalised for failing to accurately display air fares and I do not believe that they should be allowed to have their identity hidden at the expense of the consumer."
He welcomed the Spanish consumer watchdog's publication of results, which revealed that "carriers such as Ryanair, Iberia, and Spanair advertised deals that turned out to be non-existent".
However, low-cost carrier Ryanair says it welcomed the Commission's move, saying: "All prices advertised on Ryanair.com's home page and all Ryanair media advertising is fully tax-inclusive."
The company called on the Commission to widen its investigation to "cover the real scandal of unfair fuel surcharge increases" recently announced by a number of large airline companies, including British Airways, Air France and Lufthansa.
While the European Regions Airline Association (ERA) did not mention the consumer sweep in a statement issued following the publication of the Commission's report, it criticised EU air transport proposals that would require airlines to publish a detailed breakdown of their prices, splitting up, for example, the costs of airport security and fuel surcharges.
According to the association, European consumer law is sufficient to guarantee clarity for passengers.
Andy Clarke, director of air transport policy, said: "This is absurd bureaucracy and will confuse passengers. If you stay at an hotel or buy some items of clothing, you get the final price. Do you want to know what the hotel or shop spends on security or heating? Why do Europe's lawmakers believe that you have different needs when you fly?"
- 1 Jan. 2008: New rules on air-fare transparency are expected to enter into force.
- 2008: Commissioner Kuneva said several more sweeping investigations regarding misleading commercial practices are planned.