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“Drip pricing” and aggressive marketing under scrutiny in Poland – charges and decisions by the Polish Competition Authority

The Polish Competition Authority (“PCA”) has recently taken action against two companies operating in the Polish market - Dr Smile and eBilet.

Dr Smile has been accused of using a marketing practice that violates the collective interests of consumers.

Meanwhile, two decisions have been taken against eBilet, one of which concerns the so-called “drip pricing” practice.

Dr Smile – the PCA initiates its investigation

Dr Smile is a company offering correction of malocclusions by using personalised (custom-made) teeth straightening trays. 

In its press release, the PCA identified the company's following service practice: a consumer makes an appointment (via an online platform) at one of the dental clinics, where a dental scan is performed. Then, based on the dental scan, the company prepares a treatment plan.

Subsequently, the company's staff calls the consumer and provides the treatment plan and financial terms. According to the PCA, during that conversation, consumers are pressured to sign a contract without having sufficient time to familiarise themselves with the terms of the offer.

The PCA stated that the alleged practice was not acceptable, in particular, as the consumers did not have any right of withdrawal, which does not apply to personalized and tailored products for a specific consumer. 

The alleged practices used by Dr Smile included pressure and obstruction of access to the terms and conditions.

As a result, Dr Smile was accused of a practice that violates the collective interests of consumers, with a potential fine of up to 10% of its annual turnover.

Dr Smile has also been accused of using an abusive clause in the “Understanding on Cancellation of the Agreement”, which consists of a waiver of any future claims by consumers including claims related to medical errors.  

The PCA pointed out it is reprehensible to introduce provisions limiting the entrepreneur's responsibility for the performance of the contract and depriving consumers of the possibility to pursue their claims.

eBilet – what happened?

eBilet operates an online service selling tickets for various types of events, such as sports, cultural and entertainment events. The PCA issued two decisions in its case, one of which imposed a fine.

The first decision concerned the practice of so-called “drip pricing”. This is the practice of adding unannounced, additional or mandatory fees at the final stage of the order.

eBilet’s website showed a minimum price when presenting certain events. As the consumer goes through the shopping process, selecting the cheapest possible options one at a time, the consumer would see the price plus a mandatory service charge at the very end before making the purchase. Therefore, the company’s way of presenting prices was misleading to consumers as consumers were not able to purchase a ticket for the price stated at the beginning of the purchasing process.

The company was not fined because it had already agreed at the beginning of the procedure to stop the practice and refund the service charge to consumers who filed complaints about it. The PCA considered this to be sufficient and issued a decision requiring the company, inter alia, to present the price – which also includes the obligatory service fee - in a clear, legible and not misleading way.

What was the second decision?

The second infringement decision refers to some events that were cancelled or postponed due to the COVID-19 restrictions. eBilet applied rules of the Anti-Covid Act, which allowed deadlines for refunds to be extended of up to 180 days, whereas such rule could not be applied to ticketing. As a result, instead of refunding under standard terms and conditions, i.e. 14 days, the company used a 180-day deadline.

The PCA considered this to be an unfair market practice and imposed a fine of PLN 1,325,000.

Why are these cases important to note?

The above cases demonstrate the PCA’s increased activity in the areas of marketing practices. Therefore, companies should double-check their consumer-facing practices.

If you need more information or further guidance in this area, please contact Stanislaw Szymanek and Marcin Alberski 



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