ACM in action part II: gigantic fines to Corendon remain

A while ago, the Netherlands Authority for Consumers & Markets (ACM) warned the automobile sector for incorrectly displaying car prizes. Shortly before that, the ACM had already addressed the travel industry. The ACM imposed two gigantic fines to the travel agency Corendon of a total amount of € 350.000. Recently, the District Court of Rotterdam declared Corendon’s appeal against these fines unfounded.

One of the focus areas of the ACM is price transparency in the travel industry. The starting point is that all variable costs which are unavoidable and foreseeable, should be shown in the ad itself in order to enable the consumer to compare different offers. An example of unavoidable and foreseeable costs is charging costs per booking in addition to the price of airline tickets or tour packages calculated per person – for example service and booking fees.

The amount of unavoidable and foreseeable fixed costs are known in advance and therefore must always be included in the advertised price from the start. In case of unavoidable variable costs, the ACM considers it sufficient to list them directly with the advertised price in a transparent manner.

Corendon failed to do so. The travel agency charged additional service fees which were unavoidable variable costs, but did not list them directly at the beginning of the booking process. These costs were displayed only in the footer at the bottom of the page in small print. As a result, the consumer was not able to see the final price. According to the ACM, this is insufficiently transparent.

At the District Court in Rotterdam, Corendon stated that the display of the variable costs is only required when these costs are known, and not before that. On the homepage, where the booking process has not started yet, the final price is not known. A violation would thus not be the case, says Corendon.

The Court does not follow this argument. Corendon displays the price of a tour package per person, but charges additional fees per booking. These are variable costs which should be clearly displayed in the advertised price from the first page, for example directly below or next to is in order to make the variable costs visible at a glance. The consumer should be able to see the full price.

The fines of a total amount of 350K are high and will remain. A clear signal that non-transparent prizes in the travel industry are not tolerated – not by the ACM, and neither by the judge.

Tamilla Abdul-Aliyeva