The judgment was prompted by a case brought by the Italian Competition Authority against Ryanair in 2011. The Competition Authority imposed a fine on Ryanair for not immediately indicating on its website:
- that 6% VAT had to be added to the price;
- what the online check-in allowance was; and
- what additional charges were made for paying with a credit card other than the one approved by Ryanair.
Ryanair appealed the decision. After an unsuccessful appeal at first instance, Ryanair went to the Italian Council of State, which referred the following question to the CJEU for a preliminary ruling: are the price elements in question foreseeable and unavoidable in the light of the European Regulation N° 1008/2008 on the operation of air services in the EU?; and should they therefore already be indicated in the initial price offer?
In its ruling, the CJEU reiterated previous case law under which an airline is obliged to indicate in its initial online offer(s) (the first time the flight price is indicated), the airfare and, separately, the taxes, charges, surcharges and fees that are unavoidable and foreseeable. Optional price supplements, on the other hand, must be indicated in a clear, transparent and unambiguous manner only at the beginning of the booking process.
The CJEU then applied this case law to the specific price elements that were the subject of the preliminary question:
- Regarding the online check-in costs, the CJEU concluded that if there is an option to check in free-of-charge (for example, a physical check-in at the airport), then these costs must be regarded as optional price supplements. However, if the airline only offers one or more check-in methods for which the customer has to pay, then the online check-in costs must be considered unavoidable and foreseeable and thus be indicated in the initial price offer.
- Next, regarding the 6% VAT surcharge, the CJEU has considered that the VAT applied to the optional surcharges for domestic flights, is an optional price supplement, as opposed to the VAT applied to the airfare for domestic flights, which must be indicated in the initial price offer.
- Finally, the CJEU has ruled that the additional costs charged when payment is made by a credit card other than the one approved by Ryanair, are unavoidable and foreseeable and must therefore be indicated from the beginning.
Ryanair reacted to the ruling by stating that it had already adjusted the prices on its website a few years ago and is operating according to the rules.
This preliminary ruling applies throughout the EU. Not only the Italian court, but also the legal jurisdictions in other Member States are thus bound by the judgment.