Plan to tackle communications-contract clauses
The Government is to introduce legislation to give consumers more rights to switch providers when faced with price increases for mobile or broadband services.
The Department of Culture, Communications and Sport said that many companies were using in-contract price increase (ICPI) clauses to increase prices for communication services – rises usually announced in spring each year.
An ICPI clause is a contractual clause that allows a provider to raise the price a consumer pays for a service during the course of a contract.
These rises were often linked to inflation, but some providers have introduced fixed increases each month during the course of a contract.
CJEU ruling
Currently, because of a 2015 judgment from EU Court of Justice (CJEU), the use of these clauses to increase prices does not give consumers the right to exit the contract without paying a penalty.
The proposed legislation will create a statutory right of exit without penalty where the mechanism used to increase the price is an ICPI clause. It will not prohibit the use of ICPI in contracts.
Minister Patrick O’Donovan said that the proposed legislation would help “rebalance the scales” in favour of consumers.
“It will force mobile and broadband providers to provide advance notice and a right of exit to consumers when certain clauses are used, thereby allowing consumers shop around for the offer that best suits their needs,” he stated.
The 2015 CJEU ruling stated that a price-adjustment clause based on a clear, comprehensive, and easily accessible method of indexation, resulting from state decisions and mechanisms, did not amount to a modification of the contract that would allow a customer to withdraw from it without penalty.