A Court Ruling Boosts Check24 as ECJ Leans Towards Ratings for Insurers
Insurance advisory strengthened by ECJ in favor of Check24: Judicial ruling bolsters comparison platform's stance. - Commission has initiated multiple measures to ensure effective execution of its proposals.
In the realm of car insurance, cruises, and funerals, consumers can turn to comparison portals for a quick rundown on various products and services. But can these sites also dish out ratings and points?
The European Court of Justice (ECJ), in a case against Check24, has lent support to the comparison portal's stance, although the case ain't over yet. The ball is now in the Munich I Regional Court's court.
Navigating complex insurance with simple ratings
Check24's controversial rating system, which scores different insurers from 1.0 to 4.0, aims to offer a clear picture among an ocean of policies. However, HUK-Coburg insurance views this as an illegal form of comparative advertising and filed a lawsuit, seeking an injunction and damages. The lawsuit aimed at a handful of Check24's comparison portal companions.
HUK-Coburg contends that insurance is too complex to be summed up in a single numeric rating, making the evaluation entirely subjective and inappropriate. The Munich I Regional Court, handling the case, requested the ECJ's input on whether such comparisons are legitimate when presented as ratings or scores. It's a decision that could shape the entire industry, considering other portals employ similar evaluations.
Could it be unlawful advertising? The judges are skeptical
The regional court now needs to decide if Check24's operation falls under the bracket of "comparative advertising" under EU law, which the ECJ judges have stated can only be the case if Check24 and HUK-Coburg are competitors, i.e., they're chasing after the same clients.
While the court must reach this determination, the Luxembourg judges have expressed their doubts on this front, as HUK-Coburg delivers insurance services while Check24 simply compares and mediates them.
Both parties refused to comment on the proceedings.
Consumer advocates: Comparison portals lack independence
Comparison platforms hold a substantial market position, as those not included face a disadvantage. Legally, they operate as brokers. A customer concluding a policy via their portal generates a commission for the portal, which Check24 confirms is "traditionally" the case with their platform.
Sandra Klug, insurance expert at the Hamburg Consumer Center, advises consumers that comparison portals don't offer a total overview. "They present themselves as unbiased, but that's not always the case."
Not the first court spat of this kind
Klug argues that these platforms give consumers a false sense of security, as complex insurance products carry considerable risks. In the past, the Frankfurt Regional Court found that Check24 covered less than half of the market for private liability insurance, examining only 38 out of 89 potential insurers' tariffs, and according to the consumer center, these were exclusively companies that would pay a commission for a contract conclusion.
- Check24
- ECJ
- Comparison Platform
- HUK-Coburg
- Funeral
- Cruise
- Munich Regional Court I.
- Munich Regional Court
- Luxembourg
Insights:
- The ECJ has provided a positive indication for comparison portals, such as Check24, suggesting that ratings may be considered permissible if they comply with EU comparative advertising laws.
- The final decision regarding the specific legitimacy of Check24's rating system will depend on further examination by the Munich I Regional Court.
- EU law allows for comparative advertising if it is fair and based on objective criteria, and ratings must meet these criteria to be permissible.
- Comparison portals must adhere to overall consumer protection and advertising regulations.
- There is currently no specific EU regulation directly addressing the assignment of ratings by comparison portals for insurers.
- The European Court of Justice (ECJ) has given a positive indication towards ratings for insurers on comparison portals, such as Check24, providing the ratings comply with EU comparative advertising laws.
- The final decision on the legitimacy of Check24's rating system will rest with the Munich Regional Court I, following the ECJ's input against HUK-Coburg's lawsuit for an injunction and damages.
- In the ongoing case, the ECJ judges are skeptical that Check24's rating system constitutes comparative advertising, given that HUK-Coburg delivers insurance services, while Check24 functions as a comparison and mediation portal.
- Consumer advocates, like the Hamburg Consumer Center, argue that comparison portals should be viewed with caution, as they present themselves as unbiased while potentially favoring companies that pay for contract conclusions.
- The current case is not the first of its kind, as past court rulings have found that some comparison portals, such as Check24, may not fully represent the market for certain insurance products, such as private liability insurance.
