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European Court of Justice reviews ban on opt-out offers

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Germany, United Kingdom

European Court of Justice reviews ban on opt-out offers

The European Court of Justice ("ECJ") will review the prohibition of opt-out offers in online bookings of travel products.

Fieldfisher acted for ebookers.com Deutschland GmbH ("ebookers"), an online travel agent operating in Germany, in its successful application for a review by the ECJ of the European Community regulation on common rules for the operation of air services EC/1008/2008 (the "Regulation"). 

The Regulation recasts and consolidates various EC regulations concerning the EU's internal aviation market. The reference concerns Article 23(1) of the Regulation, which provides, inter alia, 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. In practice, this means that online customers may 'opt-in' to accept supplements to their air fare by actively ticking a tick-box during the booking process. Article 23 necessarily imposes an 'opt-out' prohibition as suppliers are not allowed to pre-select a tick-box for any costs covered by Article 23.

On 3 March 2011, in the course of a preliminary ruling, the Higher Regional Court in Cologne referred to the ECJ the question as to whether the opt-out prohibition in Article 23 extends to third party offerings outside of the customer's flight contract. The reference is intended to clarify the legal position as there are presently doubts as to (i) the meaning of the text of the Regulation, which refers only to air fares and air carriers; and (ii) the intention of the legislators, whose main aim was to prevent low-cost air carriers from publishing misleading ticket prices.

Philipp Plog, a Partner in Fieldfisher's Hamburg office who represents ebookers in the case, stated: "The decision of the Higher Regional Court of Cologne confirms our stance that the legal position is not clear, contrary to the opinion of many consumer associations".

In recent years, fair trading and consumer associations have sent warning letters reminding numerous online travel agents and suppliers of their obligations under Article 23. Most complied with those demands and signed 'cease and desist' undertakings regarding their use of opt-outs. In some cases, those associations obtained first instance judgments against online travel agents and suppliers who failed to comply.

Philipp Plog is hopeful that the reference will provide much needed clarity and open the market to the use of opt-outs for third party services: "The preliminary decision process should not only result in a mandatory legal decision applicable across the European Union, but, if successful, also open new opportunities for market participants who are currently limited by cease and desist undertakings".

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