No such thing as a free invoice?

Finnish Supreme Court takes a stand on charging consumers for printed invoices

In a long-anticipated ruling given on 16 August 2016 (KKO 2016:49), the Finnish Supreme Court confirmed that charging consumers for printed invoices cannot automatically be prohibited as unfair. Instead, the acceptability of additional fees applied to certain invoicing methods must be assessed on a case-by-case basis. 

Background of the dispute 

Following the rise in popularity of various electronic invoicing methods, some businesses have started charging their customers for printed invoices. The Finnish telecommunications operator Elisa is among these. In February 2013, Elisa announced that it would raise the additional fee it charged consumers for printed invoices from EUR 0.95 to EUR 1.90. 

Elisa's announcement provoked an intervention from the Consumer Ombudsman who demanded that Elisa must provide consumers with printed invoices free of charge. 

Elisa refused to comply. It argued, among other things, that printed invoices are costly for it to produce and send, that electronic invoicing is more ecological and promotes the development of the information society, and that all consumers wishing to avoid paying the additional fee have a number of free electronic invoicing options available to them.

Not satisfied with Elisa's reasoning and wanting to set a precedent, the Consumer Ombudsman took the matter to the Market Court. 

The Consumer Ombudsman claimed, among other things, that charging consumers an additional fee for printed invoices entails commercialising a basic element of the contractual relationship between a business and a consumer. This must be deemed unfair within the meaning of the Consumer Protection Act ‒ especially because consumers without internet access are unable take advantage of the free electronic invoicing options on offer.

In its ruling, the Market Court took the middle ground and prohibited Elisa from charging consumers an additional fee of EUR 1.90 or more for printed invoices. According to the Market Court's reasoning, a fee that size could not be considered insignificant in relation to what a consumer typically pays to use Elisa's services. Therefore, it was unfair. In addition, the Market Court stated that also a fee lower than this could be unfair.

Both Elisa and the Consumer Ombudsman petitioned for and were granted leave to appeal to the Supreme Court. 

The Supreme Court's ruling

The Supreme Court overturned the Market Court's ruling and dismissed the Consumer Ombudsman's claims in their entirety. 

The Supreme Court reasoned that the freedom of contract allows for businesses to agree with consumers on pricing models deviating from the typical arrangement where the cost of invoicing is included in the price of the service. Consequently, contractual provisions according to which certain invoicing methods are subject to an additional fee are not automatically unfair. Such provisions may be included in consumer contracts provided that they are clearly and comprehensibly formulated and that, under the circumstances at hand, they do not lead to an unfair outcome for consumers.

In this regard, the Supreme Court concluded that Elisa had clearly indicated in its terms of service that consumers who chose to receive printed invoices would be charged an additional fee. The Consumer Ombudsman had not even claimed that this fee would have been disproportionately high in relation to the costs actually incurred by Elisa for providing printed invoices. Therefore, charging the fee could not be considered unfair. 

On the contrary, the Supreme Court acknowledged that prohibiting Elisa from charging an additional fee for printed invoices would probably have led Elisa to include the costs associated with providing such invoices in the prices of its services. As a consequence, also those consumers who had chosen less costly invoicing options would have ended up bearing a portion of these costs.

With respect to the argument that not all consumers have internet access, the Supreme Court took the position that although businesses providing essential services, such as telecommunications services, must offer consumers at least one invoicing option not requiring internet access, it is not necessary for this invoicing option to be free of charge. 

Practical implications

The Supreme Court's ruling confirms that it is possible for businesses to charge additional fees from consumers who choose to receive printed invoices or to use other invoicing methods entailing extra costs for the business. However, such fees must be clearly specified in the business' terms of service. Moreover, to help ensure that such fees are able to withstand possible later scrutiny, they should be set proportionate to the actual costs associated with the invoicing method in question.

The question of whether businesses are allowed to impose additional fees for all invoicing options is somewhat unclear from the Supreme Court's ruling. 

During the course of the proceedings, both the Consumer Ombudsman and the Market Court supported the idea that at least as far as paying by invoice is the only possible payment method, businesses must offer consumers at least one free invoicing option. Although such a requirement cannot be traced back to any specific legal provision, the Supreme Court also referred to it ‒ albeit only in passing ‒ as being based on the general principles of obligation law. 

Considering the ambiguity of the Supreme Court's ruling in this regard, it is advisable for businesses to make sure that at least one free invoicing option is made available to consumers. This can be done, for example, by using various electronic means such as email or e-invoice services. Also, because according to the Supreme Court, there are no formal requirements on how an invoice should be delivered, even a free text message containing all of the necessary payment information may be considered sufficient ‒ as it was in the case at hand.