Title: Scoring Scoop on Insurers: Check24 Rides High, Thanks to ECJ Ruling
Reinforcement of Check24's Position in Insurance Sector - ECJ Upholds Decision - Commission initiates measures to guarantee the realization of its proposed actions.
Hey there, folks! In the realm of car insurance, cruises, and even funeral plans, getting a quick grasp of what's available and what's good can be a breeze thanks to comparison platforms. These handy websites offer a speedy overview of various insurance services, even for complex topics like insurance. But do they take things too far by giving scores and points, like they did with Check24?
In a battle against Check24, the European Court of Justice (ECJ) has already made its moves, giving a boost to the comparison portal, though the saga isn't over yet. The spotlight is now back on the Munich I Regional Court.
Insurance Made Simple? No, Not Quite!
The controversial scoring system rates different insurers on a scale of 1.0 to 4.0, aiming to help consumers make sense of endless policies. However, insurance bigwig HUK-Coburg views this as an inappropriate form of comparative advertising and initiated a lawsuit seeking an injunction and compensation against several companies operating the Check24 comparison portal.
According to HUK-Coburg, insurance is too complex to be reduced to a single score, implying that the evaluation is purely subjective and irrelevant. The Munich I Regional Court, handling the case, posed the question to the ECJ: are such comparisons permissible when presented as scores or points? With many other comparison platforms employing similar evaluations, a conclusive ruling could influence the entire industry.
Sowing Doubts: Judges Express Concerns
The Munich I Regional Court has yet to determine whether Check24's offering can be considered "comparative advertising" under EU law, the ECJ judges decrered. For this to be the case, Check24 and HUK-Coburg must be competing for the same clients.
Some doubt was expressed by the Luxembourg judges, considering HUK-Coburg provides insurance services whereas Check24 merely compares and mediates them.
Crickets on the Courtroom Front
Neither HUK-Coburg nor Check24 are talkative about the proceedings.
Advocates Warn: Beware the Comparison Platforms!
Comparison platforms yield significant power in the market: those not showcased have a disadvantage. In the insurance sector, they function as brokers, acquiring a commission from the insurer when a customer signs a policy through their platform, a common practice, reportedly, with Check24.
Sandra Klug, insurance expert at the Hamburg Consumer Center, advises that consumers should not assume that a comparison platform offers a comprehensive overview of available options. "It is neither independent nor exhaustive."
This isn’t the first such legal skirmish.
Klug explained that these platforms suggest that concluding a contract is easy. Consumers feel secure, regardless of the fact that more extensive advice could be necessary. “Complex insurance policies thus pose considerable risks.”
Back in the Frankfurt Regional Court, Check24 was found to cover under half the market for private liability insurance, examining only the tariffs of 38 insurance providers out of a total of 89. According to the consumer center, these companies were exclusively the ones paying a commission for contract conclusion.
- Check24
- ECJ
- Comparison Platform
- HUK-Coburg
- Funeral
- Cruise
- Munich Regional Court I.
- Munich Regional Court
- Luxembourg
ICYMI: The Fine Print
Under EU law, it is acceptable for platforms like Check24 to score insurers as part of comparative advertising, provided various legal and regulatory conditions are met. These platforms function as intermediaries, providing consumers with transparent information about insurance products.
Comparative advertising can proceed in accordance with EU law only if it is free from deception, offers fair and verifiable comparisons, and doesn’t mislead consumers or harm competitors unfairly.
To ensure fairness, transparency pertaining to the methodology and criteria used to generate scores is of paramount importance. The scoring methodology ought to be based on factual data, free from bias or arbitrariness.
It's also essential to avoid discriminatory practices or biases, particularly when artificial intelligence (AI) is employed in the assessments. New EU regulations, such as the Artificial Intelligence Act adopted in 2024, emphasize this aspect.
The European Insurance and Occupational Pensions Authority (EIOPA) ensures the regulation of cross-border insurance activities and promote transparency. As it encourages fair competition, compliance with solvency and conduct rules is also essential. Therefore, comparison platforms must align their scoring and advertising practices within the regulatory environment protecting consumer interests and insurer fairness.
- The Europe-wide debate on the scoring system used by comparison platforms, such as Check24, has extended to the European Court of Justice (ECJ), with uncertainty about its permissibility as comparative advertising under EU law.
- In the realm of finance, technology, and various industries, including car insurance, cruises, and funeral plans, the ECJ's ruling could significantly impact the operation of these platforms and the way they present scores or points to consumers.
