Partner Sydney
"misleading and deceptive online conduct (i) failure disclose applicable fees and charges on all social media platform and (ii) issuing booking confirmations where no booking with the airline/s had been made"
In November 2024, the Australian Competition and Consumer Commission (the ACCC) commenced Federal Court proceedings against Webjet for misleading and deceptive online conduct. This involves two types of conduct (i) failure disclose applicable fees and charges on all social media platform and (ii) issuing booking confirmations where no booking with the airline/s had been made.
In relation to the first allegation of misconduct, the ACCC prosecution focusses on the following aspects of Webjet’s disclosure of its mandatory ‘Webjet servicing fee’ and ‘booking price guarantee’ fees and charges between November 2018 and November 2023:
- the existence and application of these fees and charges were not disclosed in Webjet’s social media content; and
- whilst the application of the fees and charges was disclosed on the website, app and in promotional emails, it was neither sufficiently clearly nor prominently displayed and only accessible at the bottom of the screen.
Take-aways:
- the application of fees and charges must be consistently disclosed on all social media platforms and in all social media content; and
- online disclosure of fees and charges must be prominent, not in fine print and not require a user to scroll to the bottom of the page.
In relation to the second allegation of misconduct, Webjet is alleged to have misled consumers by issuing booking confirmations, after receiving payment for the flights, where there was no airline booking confirmation between November 2018 and June 2024. This involved 382 bookings and Webjet subsequently offered the affected bookers a refund or for them to complete the booking on payment of an additional fee or higher fare. Neither remedial measure appears to have satisfied the ACCC. A key focus of the prosecution is the impact on users who made other travel arrangements and bookings in reliance on the Webjet booking confirmation.
Take-aways:
- flight booking confirmations should not be issued until the airline booking has been confirmed or platform booking confirmations should be clearly and prominently described only as confirmation that the platform has received the booking and the booking/s remain subject to airline confirmation;
- offering a refund and/or requiring users to pay a higher fare to complete their booking is not a satisfactory remedy; and
- a key issue in the prosecution is whether offering to complete the booking at no additional charge to the user would have been a satisfactory remedy.
The prosecution remains in its early stage.
EU and UK
Investigation into 20 airlines for misleading greenwashing practices
In April 2024, the European Commission and EU consumer authorities notified 20 European airlines that they were under investigation and identifying several potentially misleading green claims. The EU concerns focus on public statements and claims made by airlines in relation to climate projects or passenger contributions (payment of additional fees) to offset CO2 emissions or use of sustainable fuels. The airlines were invited to respond within 30 days, bringing their marketing practices in line with the Unfair Commercial Practices Directive. This investigation is led by the EU Commission, but enforcement is taking place at EU Member State level, by national Consumer protection authorities and national civil aviation Authorities based on the powers under EU Regulation 100/2008. The EU Commission is meeting with the national authorities and airlines to discuss solutions and monitor the implementation of the agreed changes.
The UK Competition and Markets Authority is also lobbying the UK Government to include greenwashing as a prohibited and unfair commercial practice.
"whilst the current focus is on the conduct of airlines, at some stage, the EU and other authorities will consider the role of OTAs and other intermediaries and the statements they make about greener and sustainable flying"
Take-aways:
- whilst the current focus is on the conduct of airlines, at some stage, the EU and other authorities will consider the role of OTAs and other intermediaries and the statements they make about greener and sustainable flying; and
- OTAs should exercise caution in relying on statements, data and content provided by airlines and other inventory suppliers on the sustainability and green credentials of travel products.
Greece and the EU
Greek hotels to sue Booking.com
The Hellenic Chamber of Hotels has announced plans to file proceedings against Booking.com. The proceedings are expected to seek compensation for losses suffered by members of the Chamber caused by Booking.com’s pricing policies. A key focus of the proceedings is likely to be the platform’s ‘best price’ policies which prevent hotels from advertising rates lower than those offered on the Booking.com platform. The proceedings are expected to rely on the September 2024 European Court of Justice (“ECJ”) ruling that ‘best price’ and price parity clauses were anti-competitive, not essential to the operation of the platform and that Booking.com could not compel hotels to comply with such terms, the 2023 ECJ decision that Booking.com’s pricing policies were harmful to hotel operators and owners and the freedom to contract in the Greek constitution. The applicants are also likely to rely on a 2015 Greek judgment that these ‘best price’ policies are only valid where there is reasonable legal justification for this unequal treatment and/or restrictions on competition.
We will provide further updates once the proceedings have been filed.
Key contacts
Partner London
Partner Athens
Senior Associate Bangkok
Counsel Athens
"whilst the judgment of a Greek court would only bind the parties to it, the outcome is likely to have direct ramifications across the EU. Success for the hotels may prompt similar proceedings in other EU member states"
Take-aways:
- ‘best price’ terms are widely used, not only in Greece and the EU but in a number of markets across the world;
- a key issue will be the number of Greek hotels which join the class action;
- proceedings in the Greek courts will deal with and address EU laws and regulations. Whilst the judgment of a Greek court would only bind the parties to it, the outcome is likely to have direct ramifications across the EU. Success for the hotels may prompt similar proceedings in other EU member states; and
- price parity clauses and clauses which achieve a comparable effect are likely to come under close scrutiny.
Thailand:
On the horizon: Thailand prepares a new Platform Economy law
In our first update of the year, we provided an update on the Royal Decree on the Operation of the Digital Platform Service Businesses that are subject to Prior Notification (2002) (the “Royal Decree”).
On the heels of the Royal Decree, Thailand’s Electronic Transactions Development Agency (“ETDA”) is preparing the draft Platform Economy Act (“PEA”) and recently circulated its policy paper for public consultation. The PEA’s principles borrow elements from the EU’s Platform-to-Business Regulation, the Digital Services Act and the Digital Market Act and are divided into two key areas: consumer protection and competition.
"the definition of “very large” digital platform operators, particularly whether this will be defined by reference to their operations in and focused on Thailand or their global operations"
On the consumer protection side, the focus is on imposing specific duties on digital media providers who, in addition to digital platform operators under the Royal Decree, will include mere conduit, caching and hosting operators. Notably, the PEA will remove the platform notification duties for most digital platforms and reserve this duty for “very large” digital platform operators. Another key aspect is the recognition of the “safe harbours” principle which provides non-complicit intermediaries protection from content-related liabilities outside the computer crimes and intellectual property contexts.
On the competition side, similar to the above EU regulations, the PEA will focus on regulating the conduct of operators designated as “gatekeepers”, i.e. operators with the power to control other operators’ access to services. Examples of prohibited conducts for gatekeepers from the policy paper are parity clause, anti-steering provision, tie-ins.
The PEA is still at a very early stage of formulation but once enacted, is intended to replace the Royal Decree.
Key issues for OTAs:
- the definition of “very large” digital platform operators, particularly whether this will be defined by reference to their operations in and focused on Thailand or their global operations;
- the extent to which legislation and regulations from the EU and other jurisdictions form the basis of the PEA, particularly harmonisation of different laws and regulations; and
- how the ETDA will enforce compliance with the PEA, once enacted.
Key contacts
Partner Sydney
Partner London
Partner Athens
Senior Associate Bangkok
Counsel Athens
