Price Discrimination in the the EU Vehicle Hire Market

An almost perfect example of price discrimination is evident in this market revealed on the BBC online news site - read this section carefully!"Charges vary for some motorists, even if they are picking up the same vehicle from the same location and from the same hire company." Then read through the article to find clues as to how some vehicle hire businesses have been able to segment the market and discriminate between drivers from different countries inside the EU.The regulators are onto the issue - expect some action unless vehicle hire businesses adjust their pricing tactics!

This example provides an application of how internet technology can make price discrimination easier to achieve.

According to the EU competition commission - six major car rental companies operating across Europe have been accused of using automatic rerouting on their websites following the identification of the consumer's IP address. The IP address provided may also prevent the consumer from completing any booking online.

Alternatively, with no rerouting, the consumer may be given a different price after having entered his/her country of residence on the website of the car rental company concerned.

The EU points to a recent case where a consumer from Germany saw the announced price increase by 100% for renting a car in the United Kingdom after entering their country of residence.

According to the the laws governing the EU single market - The EU Services Directive prohibits companies from using unjustified discrimination in access to a service on the basis of nationality or place of residence of the consumer. More details on this story are available here.