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European Commission Challenges Differential Pricing by Car Rental Companies

04 September 2014

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The European Commission has challenged the practice by car rental companies of using consumers’ countries of origin and IP addresses to determine the price that they are charged, alleging that this constitutes a form of discrimination.

In general terms, each computer or device on the internet is assigned an Internet Protocol or “IP” address. Due to the way in which IP addresses are assigned, one can usually work out the location of a customer from his or her IP address.

price changes eu lawIn a public letter to Europcar, Hertz and Avis, dated 23 July 2014, the Commission called on the companies to cease the practice of automatic rerouting of customers following identification of the customers’ IP addresses. In addition to discriminatory rerouting, the tracking of IP addresses by car rental companies has been used to prevent consumers from completing certain bookings online. In circumstances where no automatic IP rerouting has taken place, some customers were given different prices for car rental services when they entered their country of residence on the website of the car rental company concerned.