The Italian Competition Authority’s keen eye on transportation companies’ unfair commercial practices during the COVID-19 pandemic

It is well known that the Italian Competition Authority (“AGCM”) has been extremely attentive towards unfair commercial practices undertaken during the COVID-19 pandemic (for a recollection see here and here). However, while at the beginning of the pandemic the AGCM was primarily focused on e-commerce platforms making false claims about products’ beneficial effects in connection with COVID-19 prevention, diagnosis, and cure; price gouging; and the aggressive practices of some fundraising platforms, it now seems to have expanded its focus to include transportation companies as well.

Indeed, in two press releases issued earlier this month (available here and here), the AGCM announced that it had opened proceedings against: (i) Flixbus Italia S.r.l. (“Flixbus”), a company operating low-cost inter-city bus transportation services; and (ii) Alitalia – Società Aerea Italiana S.p.A. (“Alitalia”) and Volotea S.A. (“Volotea”), carriers providing scheduled passenger air transportation. Both proceedings were initiated vis-à-vis the companies’ alleged unfair commercial practices in relation to selling tickets for trips that were then cancelled due to the COVID-19 pandemic.

The AGCM initiated a primary proceeding against Flixbus for the online sale of tickets for trips falling within the period covered by governmental lockdown measures due to the COVID-19 pandemic and for their subsequent cancellation due to the health emergency. In addition, the AGCM also initiated an urgency sub-proceeding aimed at suspending the company’s unfair commercial practices, which consisted of (i) not providing consumers with adequate information and assistance; and (ii) not providing consumers with vouchers or cash refunds of a value equal to the price of the tickets purchased. Once the AGCM initiated these proceedings, the company immediately took action to correct the disputed conduct and adopted measures to protect consumers whose trips were cancelled. These measures included (i) adequate notice prior to the date of departure; (ii) providing information—at the time the trip is booked—concerning the right to obtain reimbursement of the total cost of the purchased ticket by means of a replacement voucher or cash refund, at the consumer’s discretion; and (iii) timely and accurate payment of requested refunds without any additional charges in the form of penalties, commissions, or other costs of any kind.

In light of the measures adopted by Flixbus in the immediate aftermath of the AGCM’s action, the AGCM decided not to adopt any of the precautionary restrictive measure that could have stemmed from the sub-proceeding. However, the primary proceeding still stands and the AGCM has yet to issue a decision.

The AGCM initiated two primary proceedings and two urgency sub-proceedings against Alitalia and Volotea for the sale of tickets that were subsequently cancelled by the two companies due to the COVID-19 pandemic, even though the services were to be provided in a period when governmental lockdown measures did not apply. Furthermore, both companies offered vouchers in lieu of refunds of the price of the tickets purchased by passengers. In addition, the AGCM also found that both companies failed to provide adequate information to passengers about their rights if their flights were cancelled. Finally, the AGCM also indicated that both airlines offered inadequate assistance services with regard to waiting times and communication channels made available to passengers. The AGCM has yet to publish its findings in both the primary proceedings and the two urgency sub-proceedings.

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