Europe’s top court has ruled that flight cancellation insurance cannot be automatically included in online prices and must instead be offered an “opt-in” basis only.
The decision of the Court of Justice of the European Union (CJEU) follows the opinion given by the Advocate General in May this year (read our previous article here).
A German consumer group brought an action before the Regional Court in Bonn against the online travel company ebookers.com for automatically including the cost of flight cancellation insurance in the total price presented to a customer. A customer who did not wish to purchase the cancellation insurance had to actively click through several steps to remove it from the total price payable to ebookers.com.
The Bonn Court upheld the consumer group’s complaint and ebookers.com subsequently lodged an appeal with the Higher Regional Court in Cologne. This Court sought clarification from the CJEU on the applicability of the relevant EU Regulation for the operation of air services. Pursuant to the Air Services Regulation, the final price of air fares offered to the public must include “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”. The Regulation further requires that “optional price supplements shall be communicated in a clear, transparent and unambiguous way at the start of any booking process and their acceptance by the customer shall be on an “opt-in” basis.”
The Cologne Court asked the CJEU in particular whether costs connected with air travel, such as flight cancellation insurance, can be presented as part of the total price where the company organising the air travel is not itself an air carrier.
The Court decided that the Air Services Regulation applied to ebookers.com notwithstanding the fact that it was not an air carrier. In considering the question, the CJEU referred not only to the Regulation but also to the general requirement regarding consumer rights and additional payments in the Consumer Rights Directive. The CJEU noted that the Regulation was designed to prevent consumers from being induced to purchase additional services that are not necessary for the purposes of the flight, unless the consumer explicitly chooses to buy those services.
The CJEU concluded that services such as flight cancellation insurance supplied by a party other than the air carrier and charged to a consumer by the company selling the air travel must be considered to be optional price supplements and therefore must be offered on an “opt-in” basis only.
The decision will be of particular interest to businesses in the online travel sector.
Contributed by John Magee
