DigitalizationHidden costs on mediation platforms

Today, the market watchdog team “Digital world” at the consumer association Bavaria published its results on online mediation platforms in the service sector. It shows that these platforms are recommendable only with some reservations, since they do not charge for their services explicitly. However, consumers still pay – either with their personal data or via higher prices.

This study included an analysis of 28 mediation websites and their general terms and conditions – covering each of the areas of accommodation, mobile phone tariff, electricity tariff, flights and credit. Moreover, 643 users of mediation platforms were interviewed in a representative online survey.

These are more details:

  • Higher prices: Mediation platforms receive commission payments on behalf of the service providers in order for them to have their services listed. This increases prices for consumers in the end. The platforms' ranking of search results is also linked to commission payments.

  • Non-transparent contracts: Various contracts are concluded if services are booked via those platforms – with the platform provider and also with the original service provider. Consequently, this is not very transparent for consumers. The exact contractual responsibilities were also not explained during the booking process on any of the 28 examined websites.

  • Incomplete offers: Consumers can hardly verify whether platforms truly indicate all available offers, given that only eight out of 28 websites transparently displayed their de facto market coverage. However, according to the survey results, 48 percent of consumers believe that mediation platforms offer them a complete market overview.

Tatjana Halm, head of the market watchdog team “Digital world” at the consumer association Bavaria, said: “The impact of commission payments on the ranking of search results is difficult for consumers to determine. That is why we are particularly critical of them. In the event of a complaint, unclear contractual relationships can ensure that the service provider and the platform shift responsibility towards one another and that the consumer becomes the victim. Due to the lack of transparency, there is currently no guarantee that consumers will really find the best offer for them on mediation platforms.”

Source: Bavarian Consumer Center

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