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Friday, May 24, 2024 | Back issues
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Austria Can Crack Down on Cash Surcharges

(CN) - EU states may bar companies like T-Mobile from imposing surcharges on customers who opt not to pay via credit card, Europe's highest court ruled Wednesday.

A consumer group took T-Mobile Austria to court over the phone carrier's policy of charging customers extra if they pay via cash, check or online bill pay. Credit or debit card users do not face these fees. The group said T-Mobile's practice violates Austria's general prohibition on handling surcharges.

After losing at both the trial court and appellate level, T-Mobile took its case to the Austrian supreme court. Justices there asked the European Court of Justice whether Austria's general ban on surcharges complied with EU law, and whether it extended beyond banks to cellphone companies.

Adopted its adviser's opinion from last year, the high court said Wednesday that EU law gives member states the power to forbid or limit companies from demanding specific forms of payment and from penalizing customers who choose less-favored alternatives.

"Although member states must take into account the need to encourage competition and the use of efficient payment instruments when they limit or prohibit the levying of charges for the use of a payment instrument, they nevertheless have a broad discretion in applying the power conferred on them by EU law," the Luxembourg-based court wrote.

The justices also declined T-Mobile's request to limit the timeframe for which it could be held liable for violating Austrian law. They noted that the phone carrier's vague fear of "serious financial consequences" for it and others in the telecommunications sector is not sufficiently serious enough to limit the temporal effects of the judgment.

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