Scorecards for Insurers: Check24's Victory and What it Means for EU Comparison Platforms
Increased guidelines for insurance companies - European Court of Justice bolsters Check24's stance - Ensuring Compliance: Commission Implements Proposed Measures
In the bustling world of consumer services, comparison platforms have become an invaluable tool for making informed decisions—be it for car insurance, cruises, or even funeral plans. But can these platforms also assign scores and ratings? A recent, ongoing court case has shed some light on this question.
The European Court of Justice (ECJ) initially strengthened the position of Check24, a leading comparison portal, in a dispute about scoring insurers. However, the final verdict is yet to come, as the case has been sent back to the Munich Regional Court.
The controversy surrounds a scoring system developed by Check24 to rate various insurers across a scale of 1.0 to 4.0, aiming to give consumers an easy-to-understand overview of the best policies available. This scoring method, however, has been challenged as an unacceptable form of comparative advertising by HUK-Coburg, an insurance company.
HUK-Coburg argues that the evaluation is subjective and misleading, and the Co. has filed a lawsuit against several companies operating the Check24 comparison portal, seeking an injunction and damages. The Munich Regional Court, which is handling the case, wanted to know whether such evaluations, presented as scores or points, are permissible. As comparison platforms often employ similar methods, any final ruling could have significant implications for the entire industry.
The ECJ has expressed doubt about whether Check24's offerings can be considered "comparative advertising" under EU law. According to judges, for such a classification to hold, Check24 would have to compete directly with HUK-Coburg—a claim that the Luxembourg judges find questionable given that Check24 merely compares and mediates insurance services, not offers them directly.
Neither HUK-Coburg nor Check24 have commented on the proceedings. Consumer advocates argue that comparison platforms should not be trusted to provide a comprehensive overview of available options, as these platforms function as brokers earning commissions from insurers, potentially skewing the evaluation process.
This isn't the first legal dispute of this kind. In an earlier case, Check24 was found to cover less than half the market for private liability insurance, examining only the tariffs of about 40% of relevant insurers. Consumer centers suggest that these platforms may only present options from companies willing to pay a commission for the conclusion of a policy.
- Check24
- ECJ
- Comparison Platform
- HUK-Coburg
- Consumer Advocates
Insights:
The ECJ's latest ruling on the HUK-COBURG Haftpflicht-Unterstützungs-Kasse kraftfahrender Beamter Deutschlands a.G. v. Check24 Vergleichsportal GmbH case suggests that comparison platforms, like Check24, do not compete directly with the insurers they compare. Instead, they operate as intermediaries in a separate market. This differentiates them from traditional comparative advertising scenarios where direct competitors compare products or services[1][2].
However, the ruling does not explicitly confirm or deny the use of scores as permissible or impermissible under all circumstances. The key focus lies on classification, with the ECJ emphasizing that comparison platforms like Check24 are intermediaries rather than competitors[1][2]. For any scores assigned by these platforms to be considered valid, they must adhere to the principles outlined in Directive 2006/114/EC, avoiding misleading advertising, and conforming to the conditions for permitted comparative advertising[2].
- The European Court of Justice (ECJ) initially supported Check24, a leading comparison portal, in a dispute regarding scoring insurers, yet the final decision remains undecided.
- HUK-Coburg, an insurance company, challenges Check24's evaluation system, asserting that it is subjective and misleading.
- Check24's scoring method aims to provide consumers an easy-to-understand overview of the best insurance policies available.
- If any scores assigned by comparison platforms, like Check24, are found to be misleading, they must conform to the conditions for permitted comparative advertising as outlined in Directive 2006/114/EC.
- Consumer advocates argue that comparison platforms may not offer a comprehensive overview of available insurance options, potentially skewing the evaluation process due to the commission they earn from insurers.
- The ECJ doubts whether Check24's offerings can be classified as "comparative advertising" under EU law, questioning whether Check24 competes directly with individual insurers.
- The final ruling in this case could have significant implications for the entire comparison platform industry, as these platforms often employ similar scoring methods.
