April 27, 2017 / 5:39 PM / 4 months ago

German court rules price comparison websites must give commission details

KARLSRUHE, Germany (Reuters) - Germany's Federal Supreme Court ruled on Thursday that price comparison websites must make it clear to users if they only list providers from which they get a commission.

The ruling comes after the European Commission began looking last year into the transparency of search results on price comparison websites, in particular paid-for links and advertisements, following concerns that some websites were not labelling them clearly enough.

The case handled in the German court related to a funeral comparison website, where users were asked to give details of services they wanted before receiving a list of offers featuring various undertakers, with the cheapest appearing first.

The potential customers did not, however, find out that the site only listed the services of undertakers that gave the comparison portal a commission of between 15 and 17.5 percent if a contract was signed, with the only mention of this being in the business customer section of the website.

The court objected to that and said customers using such websites expected an overview of what was available on the market and were not aware they were only viewing select offers that depended on the website's financial interests.

It ruled that customers were therefore lacking crucial information and that the notice in the business customer section of the website did not suffice. The funeral comparison website will now be required to point out the commissions to consumers.

The ruling is legally binding.

Reporting by Ursula Knapp in Karlsruhe; additional reporting by Julia Fioretti in Brussels; Writing by Michelle Martin; Editing by Mark Potter

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