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PS680 - PS1442 - PS513 - Travel agencies: Expedia, Edreams and Opodo fined for unfair commercial practices


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ON-LINE TRAVEL AGENCIES: ANTITRUST AUTHORITY SANCTIONS EXPEDIA INC., EXPEDIA ITALY, EDREAMS AND OPODO ITALIA FOR UNFAIR COMMERCIAL PRACTICES

Total fines of 415 thousand euros after three separate inquiries, with contested behaviors differentiated by company.

Fines totaling 415 thousand euros for three different on-line travel agency businesses.  Three distinct investigatory proceedings led to these rulings by the Antitrust Authority, which established the limited transparency of information available to consumers, unclear mechanisms for vacation package insurance, undue credit card charges for incomplete transactions and improper claims management. The Antitrust Authority fined Expedia Inc. for a total of 210 thousand euros, Expedia Italy for 45 thousand euros, eDreams for 135 thousand euros and Opodo Italia for 25 thousand euros. The fines reflect various combinations of unfair commercial practices exercised by each company and the commitments proposed and applied to eliminate the negative impact on consumers.
The three investigatory proceedings identified and sanctioned a series of Consumer Code violations that were shared to various extents by the three companies involved.
In specific:

Discounts with much higher than advertised final prices.
All three companies were fined for offering internet promotions (flights, hotel accommodations, flights hotel) through the incomplete and deceitful presentation of promotional rates on their website home pages. Consumers were presented with incomplete information about total effective prices until the final phase of the booking process, at which time a detailed description of each cost entry for the services being purchased would add up to much higher totals than advertised on the home page. In some cases, the exact final prices for hotel accommodations remained inaccessible even after the booking process was complete, thanks to the failure to include various local and municipal taxes and fees. For these practices, the Antitrust Authority fined Expedia Inc. for 60 thousand euros, Opodo for 20 thousand euros and eDreams for 35 thousand euros.

Blockage of consumer payments
The Antitrust Authority found that Expedia Inc., Expedia Italy (for claims procedures) and eDreams have been improperly managing the credit/debit card booking and payment process for online services by failing to provide systems that ensure, in accordance with card circuit regulations, the unblocking of frozen sums for transactions that are not completed in a timely manner. Claims procedures, information about risks related to the payment system and the real reasons for blocking these sums were also inappropriate.  For these practices, the Antitrust Authority fined Expedia Inc. for 100 thousand euros, Expedia Italy for 35 thousand euros (for claims procedures) and eDreams for 80 thousand euros.

Limited transparency of insurance coverage promotion
The Antitrust Authority ruled that the "Opodo All Inclusive" insurance coverage for trip cancellation, baggage and medical expenses was being improperly promoted through a 'silent consent' mechanism during the final phase of the booking process. During the course of the proceedings, the promotional mechanism was modified so that users are required to click on a dedicated box in order to purchase the insurance. In recognition of this responsiveness, the fine was reduced to 5 thousand euros.

Excessive costs and obstruction of claims
The Antitrust Authority also fined Expedia Inc. and Expedia Italy 50 thousand and 10 thousand euros (respectively) for obstructing proper claims handling by means of limited transparency and reticence about their own identification as business entities. The customer service that eDreams provides to consumers was deemed improper, resulting in a fine of 20 thousand euros, because the only avenue for making rapid, direct contact with the on-line agency is by means of an expensive toll number, as reported by several consumers.  The fine was for 20 thousand euros.

Rome, 7 March 2011