Kiwi.com under regulatory pressure: Austrian ruling changes the game for online booking platforms
A court decision in Vienna could have long-term consequences for how online travel agencies manage refunds, fees, and terms and conditions.
The Austrian Chamber of Labour has achieved a significant legal victory against the platform Kiwi.com, which opened up one of the key issues of digital distribution – how far can OTA models go in defining their own rules for users.
Following court proceedings and a ruling by the Higher Regional Court in Vienna, as many as 31 provisions in the terms of use were challenged. The focus was on practices that directly affected the reimbursement and transparency of costs, which will now have concrete financial consequences for the platform.
End of unilateral vouchers as a substitute for refunds
One of the key elements of the verdict relates to the so-called Kiwi credit model. Platform in numerous cases, users were issued with time-limited internal credits instead of monetary refunds, often without their express consent.
The court deemed such practice unacceptable. Returns in the form of vouchers or credit are no longer possible without the explicit consent of the user in each individual case. This draws a clear line between flexible commercial models and basic consumer rights.
For users who received credit without consent from the beginning of 2023, this means the possibility of an automatic conversion into a cash refund.
Fees under scrutiny: what no longer passes muster
The verdict also strongly touches upon the models charge of extra fees, which were an integral part of the business of many OTA platforms.
Disputed fees included the chargeback fee, which was charged to users in case of a refund via the bank, as well as the so-called no-show fee of 59 euros for processing unused flights.
The court concluded that such charges in a large number of cases were not justified by actual costs or represented part of the business risk that the platform cannot pass on to the user. The consequence is clear – all unlawfully charged fees must be reimbursed.
Credit reactivation and extension
The decision also applies to previously issued loans. All loans that expired from the beginning of 2023 will be reactivated, with a new validity period of four years. Simultaneously, existing loans are also extended for the same period, giving users greater flexibility in using funds. This segment shows an attempt to balance user protection with the preservation of the platform's operational stability.
Widen the signal for the OTA market
This case goes beyond one platform. The ruling clearly shows that European regulatory framework is increasingly entering the operational models of digital travel companies.
For OTAs and aggregators, this means the need to simplify terms and conditions, increase transparency, and have a clearer policy on refunds. Complex T&C documents and multi-layered rule models are finding it increasingly difficult to pass legal scrutiny.
For agencies and other partners in the distribution chain, such decisions can have an indirect impact – from changing cooperation conditions to redefining user expectations.
Ultimately, the ruling from Austria confirms the direction in which the industry is heading: greater user protection and less room for interpretation of rules on the part of platforms.
