Why Antitrust troubles Ryanair and Vueling
All the details on the investigations that the Market and Competition Authority has opened into Vueling and Ryanair
The Competition and Market Authority wants to see clearly about the pricing policies implemented by airlines. Even those that were once low cost. The Antitrust has started an investigation against Vueling Airlines. The procedure concerns the methods by which the prices of additional services for hand luggage are determined.
VUELING PRICES VARY BETWEEN APP AND WEBSITE
Vueling gives its customers the opportunity to add some services after purchasing the ticket. One of these services is hand baggage check-in, which can be added after selecting the basic fare. This service can be purchased when you buy the ticket or even later. This is not the practice into which the Antitrust has opened an investigation but the prices for the purchase of these services vary whether carried out on the app or on the website. Vueling allegedly failed to provide information to customers on the price differences. This is the reason with which the Competition and Market Authority (Agcm) started an investigation into the Spanish low cost company.
VUELING'S LITTLE INFORMATION ON THE PRICES OF ANCHOR SERVICES
According to the Antitrust, the consumer who intends to choose this additional service and who accesses the Vueling website does not find any information on price differentiation and displays at the bottom of the page distinct amounts only between the price of the service purchased on the web/app and at the airport . Furthermore, the section of the site describing the fees for additional flight services does not appear to provide consumers with any clear distinction between the two routes.
VUELING WOULD CHOOSE TICKET PRICES BASED ON THE DEVICE USED TO PURCHASE IT
Finally, according to the Antitrust findings, Vueling would use the device used by the consumer (smartphone or PC) as a parameter to profile him and differentiate the purchase price of the ticket. “These behaviors – concludes the Authority – could provide incomplete, non-transparent and omissive information on the price definition methods linked to the purchase of the baggage transport service, differentiated between the web and the app as well as on the basis of the use of different device".
THE ALGORITHMS THAT GOVERN OUR LIVES AND DECIDE TICKET PRICES
Last summer the Italian government , with the Minister of Business, Adolfo Urso, accused Ryanair of using particular algorithms that allow it to increase prices by exploiting geo-localisation, identifying the type of device used and scanning every file saved on the device in use by the unfortunate buyer. “The companies have always denied it but it is true that there are algorithms to set the price, which we instead say that we know is true,” Francesco Marino, journalist, digital strategist, artificial intelligence expert and author of “ Chosen for you. How algorithms govern our lives and what we can do to defend ourselves ” (Castelvecchi editions). “There are algorithms capable of determining objective values, such as demand, or the time remaining before the flight and therefore aimed at increasing the price the closer it gets or decreasing the price if the flight is empty, therefore also modeling itself on the objective characteristics of that route – continues Marino -. But there are also, in all likelihood, algorithms capable of tracking user habits and on that basis proposing a personalized price." But not only. “The algorithms can identify geolocation, the type of device used – adds Marino -. I'm skeptical about the files on the PC, that actually seems like a Netflix fantasy to me."
THE ANTITRUST INVESTIGATION INTO RYANAIR
A few days ago the Antitrust started an investigation into Ryanair for abuse of a dominant position of an exclusionary nature. The first operator in scheduled air transport for passengers in Italy (more than 34% in national connections and international connections to and from Italy) would have used its dominant position "held in the markets in which it operates to extend its power also in the offer of other tourist services (for example hotels and car rental) to the detriment of travel agencies – online and offline – and of customers who use them to purchase such services". Ryanair allegedly made it very difficult for travel agency operators to book airline tickets for their customers.
THE ROADS THAT RYANAIR WOULD USE TO COMPLICATE THE WORK OF TRAVEL AGENCIES
Ryanair would have hindered travel agencies in two ways. On the one hand, the Irish low cost would have hindered the purchase by agencies of airline tickets directly from its website. “From a substantial point of view, once the booking has been identified as coming from a travel agency, Ryanair would implement a series of behaviors aimed at blocking or making more difficult the use of the service purchased – we read in the investigation -. In particular, Ryanair requires the direct intervention of the passenger to unblock the booking and conveys to the latter denigrating and untruthful information with the aim of dissuading him from using travel agencies to purchase Ryanair tickets". On the other hand, the Irish low cost "allows the purchase of the same only to traditional agencies via the GDS platform at conditions that would be far worse in terms of price, breadth of offer and post-sale management of the ticket".
THE INCREASE IN TICKET PRICES ON THE GDS PLATFORM
So if travel agencies want to buy tickets on the GDS platform, Ryanair makes them pay more, unlike all other companies. The associations that reported Ryanair to the Antitrust found "a huge price differential between the offer on the site and that available on the GDS, both on the "basic" transport service and on additional services such as additional baggage (hand and to board) or boarding priority”. When the purchase of a ticket is made through an account that Ryanair links to a travel agency, the company blocks the booking by sending a " Customer verification required" email . This prevents anyone (agency or passenger) from managing this booking and, therefore, from making any purchases of additional services or changes to it, "until the passenger personally undergoes the so-called "verification procedure", allegedly aimed at verifying his identity."
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/perche-lantitrust-turba-ryanair-e-vueling/ on Wed, 11 Oct 2023 13:50:49 +0000.