Another hit on budget airlines: Italian authority fines Ryanair and Wizzair over cabin bag policies

Yesterday the Italian Competition and Market Authority fined Ryanair and Wizzair over their cabin bag policies. Last year Ryanair changed its cabin baggage policy allowing handbag sized carry on bags (bags that cannot fit under the seat) on board only if consumers paid for priority boarding. Wizzair shortly followed the same policy. Following these changes, the Italian Competition Authority opened a non-compliance investigation that concluded yesterday with their decision that this practice amounted to an unfair commercial practice. The Authority reasoned that hand-luggage is an essential service and that should not be subject to additional fees.

Now they are both faced with a fine, Ryanair with 3 million EUR and Wizzair with 1 million EUR and are given 60 days to change their hand luggage policy. Given the territorial scope of the decision, and given the problems of enforcement of EU consumer law (that we discussed here and here), the question is, will EU consumers/passengers of Ryanair and Wizzair benefit from their changed policies? Let's hope they (we) will!  

Ryanair seeks to kick out claims intermediaries via T&Cs

Dear readers, 

you may have not noticed - who reads standard terms anyway? - or may not be directly affected if you do not fly Ryanair, but there are interesting developments to be observed. 

Since some time, Ryanair has included the following clauses in its terms and conditions (visited on 24 July 2018):

15.2.2 Passengers must submit claims directly to Ryanair and allow Ryanair 28 days or such time as prescribed by applicable law (whichever is the lesser) to respond directly to them before engaging third parties to claim on their behalf. Claims may be submitted here

15.2.3 Ryanair will not process claims submitted by a third party if the passenger concerned has not submitted the claim directly to Ryanair and allowed Ryanair time to respond, in accordance with Article 15.2.2 above.

This is meant to preempt the intervention of intermediaries, such as EUclaim.nl, offering disappointed passengers assistance in pursuing their claims for compensation, in particular under the provisions of the passenger rights regulation.

In order to give effect to the terms (which passengers unsurprisingly may ignore), it has emerged this week, the company has sent a number of claim agents a cease-and-desist request. They essentially claim that the intermediaries are inducing contractual breach on the side of the consumers, who are invited to skip direct contact with the airline. Also, the airline maintains that consumers are in this way deprived of a substantive part of the compensation they would be entitled to (EUclaim, for instance, withholds 29% of the compensation paid, plus administrative fees). 

The Dutch consumer association Consumentenbond is not persuaded by Ryanair's good faith in the dispute, recalling the company's bad reputation qua claims management. 

For us, the interesting legal question would be whether courts would uphold the clause allowing Ryanair to ignore claims submitted by third parties without prior consumer request. This may or may not depend on the concerned country's implementation of Directive 93/13. A look at the directive's annex suggests that, while the term may not be a proper impairment in the sense of point q) in the list, it may be an inappropriate limitation of the consumer's rights to the effects of point b). It will be interesting to see whether any consumer associations will be willing and able to challenge the terms in court, or anyway whether pressure will be made on the company to get rid of them. We shall keep an eye open for future developments!

The UK enforcement action worked: Ryanair changed its practice

Following up on our last week's post on the enforcement action of the UK's Civil Aviation Authority (CAA) against Ryanair for failing to inform consumers of their rights, it looks like that the enforcement action was successful. Ryanair has changed its practice. It has emailed affected customers and published an announcement on its website, explaining passenger rights stemming from Regulation 261/2004 and what Ryanair is going to do about these rights.

Given that enforcement actions remain national, Ryanair seem to have done more that it was supposed to do. By its own account, it has emailed every affected customer. The published announcement is also accessible for all its customers. The UK based authority's action therefore seem to have gone beyond its territorial scope of authority, and helped every affected customer regardless of where they are domiciled, and regardless of where they were flaying to and from. Although (formal) enforcement actions for EU wide-infringements remain national, it seems that digital technology and a bit of a good will enabled a national enforcement action to have (informal) EU-wide effect closing thereby the current loophole in EU law.

Do you agree with the above analysis? Or would you consider that national authorities have scope to act beyond the borders of their Member State in situations like this where EU-wide compliance with the national enforcement action is possible? Share your views in comments below.