Opodo warning notices and service charges in breach of competition law?

Time and again, consumers ordering services such as travel over the Internet are pressured by Internet providers during the ordering process with warning notices to order additional services. In addition, customers are charged with additional service fees at the end of the ordering process. The Regional Court (LG) Berlin had to decide a lawsuit brought by a consumer centre, which concerned the anti-competitive nature of such business practices.

The Internet travel agent Opodo offered its customers the option of taking out a travel cancellation insurance policy as part of the booking process. If customers rejected this additional service, they had to expressly decline the offered insurance coverage and declare that they would bear all costs themselves in the event of an insurance claim. If the customer continued to reject the offered travel insurance, another window would open in which Opodo warned of high cancellation charges and more than 500,000 flight delays daily. In doing so, the travel insurance was offered again. In the next step of the booking process, the consumer had to choose between two buttons, each of which displayed the word "Next" in large print. These differed only in the small print supplement "I want to be insured" or "Next without insurance", which was easy for consumers to overlook.

Moreover, the travel prices offered by Opodo were only available if the service could be paid with an American Express card. Customers only found this out after entering their personal data in the third booking step. If this was not the case, additional service fees were charged.

According to the legal view of the Bundesverband der Verbraucherzentralen und Verbraucherverbände (vzbv) [Federal Association of Consumer Centres and Consumer Associations], this business conduct was in breach of competition law. It issued a cease-and-desist notice to Opodo and demanded an undertaking to cease. After Opodo refused to provide a declaration subject to a penalty clause, the vzbv sought judicial clarification.

Decision of the court

As the vzbv reported, the Regional Court (LG) Berlin ruled by judgment dated 29.07.2014 – Az. 15 O 413/13 (Press release vzbv) – that Opodo must not tempt its customers to conclude travel insurance through a misleading booking design and unscrupulous warning notices and must include any service charges incurred in the flight price.

The travel agent created a threat scenario with the warning of high consequential costs, which did not correspond to reality. The reference to the many flight delays was misleading because passengers are also entitled to statutory claims against the airline in the event of longer delays without insurance. This is in breach of competition law.

The Regional Court (LG) Berlin furthermore prohibited Opodo from displaying the total prices of the selected flights at the beginning of the booking too low. These must already include any service charges that may apply.

Conclusion

Exercise caution when offering travel services on the Internet! Opodo must in future disclose service charges in the context of the offer as total prices. Likewise, the Internet travel agent must not pressure its customers to conclude travel insurance as it has done hitherto. According to the opinion of the Regional Court (LG) Berlin, this is in breach of competition law.

The ruling of the Berlin court can be readily applied to the offers of other Internet service providers. The transparency requirement prohibits the addition of service charges at the end of an ordering process just as much as the influencing of consumers by an unfair tactic.