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ACM has fined KLM for incorrectly displaying its airfares

The Netherlands Authority for Consumers and Markets (ACM) has imposed a fine on KLM Royal Dutch Airlines for incorrect prices displayed on its website. On its website, KLM displayed airfares that did not include the booking costs.

The booking costs were EUR 10 per ticket, and were thus unavoidable and foreseeable. This means that the airfares should have included the booking costs. ACM has thus imposed a fine of EUR 200,000 on KLM. KLM has already adjusted its website so that the booking costs are now charged per booking, and not per ticket.

Anita Vegter, Member of the Board of ACM, explains: “Dealing with unclear prices in the travel industry is one of ACM’s key priorities. Consumers are entitled to being offered prices that include all unavoidable costs, enabling them to compare prices correctly. Furthermore, unclear prices disrupt competition. We take action against businesses that do not play by the rules. And this fine is in line with that approach.”

Background

In May 2013, ACM published several principles for the travel industry in order for them to adopt clearer prices such as:

  • The price in the advertisement is the price at which the booking can be made;
  • All unavoidable costs are included in the advertised price;
  • All variable, unavoidable costs are listed directly with the advertised price.
  • The checkboxes for optional products and services cannot be ticked in advance.

ACM has approached numerous businesses in the travel industry, informing them that their prices are displayed incorrectly. ACM took a closer look at businesses that had failed to adjust the prices on their websites in a timely manner. KLM was one of those businesses. ACM found out that KLM advertised airfares on its website www.klm.com  with the message that these prices did not include booking costs of EUR 10. During the booking process, it turned out that these costs were charged per ticket. That made these costs foreseeable and unavoidable. That is why they had to be included in the advertised prices. KLM thus violated the EU rules on price transparency.