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23 April 2014
The Italian Competition Authority recently issued two decisions against leading European low-cost airlines Ryanair and easyJet, fining them €850,000 and €200,000 respectively, for misleading commercial practices.
Following a large number of complaints from Italian consumers and subsequent investigations, the Competition Authority held that both airlines had infringed the Consumer Code (Legislative Decree 206/2005) by failing to provide adequate and detailed information in respect of the optional purchase of travel insurance for prospective flight cancellations, as air carriers are required to do during the online booking process. It was found that the Ryanair and easyJet websites did not make clear the extent of the policy excess in case of indemnification, which increased proportionally to the value of the ticket booked by the insured traveller; there was also a lack of information on the taxes and airport charges not covered by the insurance policy. It was further discovered that the airlines had established a peculiar procedure for the reimbursement of claims, creating obstacles by requiring customers to call a premium-rate phone number to request a 'no-show' certificate (ie, the basic evidence required by the airlines to grant reimbursement) and to pay an extra fee to cover the costs of the reimbursement procedure – which was even higher than the price of the insurance policy sold during the online booking process.
The Competition Authority considered that this behaviour could discourage consumers from submitting claims or make attempts to do so ineffective. In this respect, the Competition Authority's investigations led to the collection of data proving that only a very low percentage of travellers which held insurance coverage and did not subsequently embark on the booked flight had tried to submit a reimbursement claim.
The difference in fines imposed on Ryanair (€850,000) and easyJet (€200,000) was grounded on the fact that easyJet had already modified its website, in terms of transparency and informative items, to ensure compliance with the Consumer Code. It was also noted that the Ryanair website had a complex and unclear mechanism to deselect the optional purchase of travel insurance should the customer have a change of heart before finalising the booking.
The Competition Authority's resolutions confirm the increased attention paid by EU national regulators to additional charges applied by airlines and their marketing practices in general, with the aim of safeguarding consumers against unfair or misleading behaviour.
For further information on this topic please contact Laura Pierallini at Studio Legale Pierallini e Associati by telephone (+39 06 88 41 713), fax (+39 06 88 40 249) or email (firstname.lastname@example.org). The Studio Legale Pierallini e Associati website can be accessed at www.studiopierallini.it.
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