On 29 October 2019, the Regional Administrative Court of Lazio (Tribunale Amministrativo Regionale del Lazio, TAR) annulled the fines inflicted on 20 February 2019 by the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato - AGCM) to Ryanair1 and Wizz Air2 for their cabin bag policies.
The proceedings concerned the conduct of the two low-cost airlines, consisting of the misleading presentation to consumers of the standard fare for air transport services offered on the websites. In particular, following the update of cabin bag policies, which came into force on 1 November 2018, so-called trolley bags (large hand luggage up to 55x40x20cm), an essential and predictable element of the final price of the transport service, was no longer included. For reservations from 1 November 2018 onwards, the airlines span off from the standard fare the possibility of carrying a trolley bag, requiring passengers to pay an extra fee for their transport of between 6 and 25 euros depending on the mode (cabin or hold) and time of the supplement purchase.
According to the AGCM3, Ryanair and Wizz Air’s updated luggage policies, and specifically the trolley bag supplement, resulted in an ex ante separation from the fare of a fully foreseeable charge of the air transport service, potentially
capable to provide a false representation of the actual ticket cost in breach of Articles 21, paragraph 1, letters b) and d)4 and 225 of the Consumer Code of Italy. In particular, such a conduct was found deceptive as to the characteristics and price of the air transport service offered to passengers, as well as contrary to the standards of professional diligence. The AGCM therefore imposed fines in the amount of EUR 3 million to Ryanair and EUR 1 million to Wizz Air.
In the air transport sector, carriers' tariff freedom finds specific limits in Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community6, and specifically those of Article 237. According to the Court of Justice in Case C-487/12, Vueling Airlines, large hand luggage is to be considered an indispensable element of the air transport service8, and therefore by not including ab initio in the proposed ticket s price a necessary cost element, the airlines provide an incomplete representation of the economic conditions applied, misleading the consumer with respect to the final total disbursement for the chosen flight. Consequently, the unavoidable and predictable supplements of the air transport service cannot be separated from the service price and neither be subjected to additional payments. On the contrary, they should be included in the base price of the ticket, in order not to negatively affect users' consumption choices.
Seized of a challenge against the decision of the AGCM, the Administrative Court found in the first place that the AGCM did not qualify the airlines’ practice as unfair with regard to the way the ticket cost was presented, but rather to the fact that they removed from the standard tariff the possibility of carrying a trolley bag larger than those currently permitted.
According to the Court, none of the elements provided by the AGCM show that the airlines prevented passengers from bringing a hand baggage on board, imposing limits only on its size and not its weight, thus, in compliance with the Court of Justice decision in the Vueling case. Therefore, in absence of a general tariff regulation that determines specific minimum measures, the Court held that the airlines were permitted to assess the reasonableness of baggage size and change a cost element accordingly. In the case at hand, the size imposed by Ryanair and Wizz Air for hand luggage were not unreasonable, as the passenger is neither prevented from choosing between a standard ticket with a slightly higher cost and a cheaper ticket, nor from bringing his own personal effects on board. The AGCM decision does not contain any detailed comparison between the fares of all other airlines and those of Ryanair and Wizz Air for each individual route in order to find if any difference was in existence obliging the consumer to make a specific choice.
Finally, the lack of professional diligence imputed to the airlines by the AGCM was found not to exist, as their offers were clear in pointing out from the very beginning the dimensions of the hand luggage allowed. The consumer was not, as a result, required to perform any complex logical-mathematical operation to identify the final price of the ticket, since its calculation was fully illustrated also with regard to the embarkation of a second large baggage.
Therefore, the Court granted the airlines’ challenge and annulled the fines imposed by the AGCM.