A commenter on a post I published last week raised an interesting concept, discounts for vaccinated travelers. But at what point does a price benefit vs price discrimination?
Interesting Question Raised In The Comments
In an article about a recent court battle between the CDC and the state of Florida, the topic was raised of circumventing the Florida state law by making COVID vaccine declarations voluntary as opposed to mandatory.
Rene, of Rene’s Points, wrote:
“The solution is simple – Charge those who refuse to voluntarily show proof of vaccination an extra $1000 per person and require them to wear a mask everywhere onboard including when in the pool and on the sun deck etc.
The fools who refuse to get the shot will soon wise up or not sail!”
Initially, I responded that this would likely violate the Florida law, SB 2006, and to the spirit of the law (but perhaps not as it’s written) I maintain that a court would likely see it the same way. More on that later.
However, as we explored that more together another commenter, Stannis, did challenge the notion that it was not price discrimination, it was a discount. That’s an interesting thought. With regard to cruises, the CDC COVID 19 vaccine travel policies have been under the agency’s purview beginning with the No Sail Order. Discounts (like free donuts) or incentives (like bonuses) have been handed out by other businesses with the voluntary display of inoculation. These have heretofore gone unchallenged.
When Does Cost Incentive Become Price Discrimination?
Most of the price discrimination laws are from the Great Depression (Robinson-Patman Act) and refer almost exclusively to monopolistic pursuits. Each of the cruise lines is able to pursue its own policies, however, if they perform in lockstep it could be argued as price-fixing which is very much actively pursued on far more recent laws. Southwest, American, and others have all paid settlements as a result.
Therefore, they couldn’t all charge $1,000 more for unvaccinated passengers and they also could not coordinate their unvaccinated surcharge amount. That would pit Royal Caribbean against Princess and Carnival. Cruises are competitive and if one line were to charge $900 more, and another $1100 the cruise line charging $900 would have a cost advantage and begin a race to the bottom.
Charging customers more based on their vaccination status is generally believed to be illegal (though Robinson-Patman wouldn’t necessarily apply) but discounts are not. However, if customers are charged a separate price based on this status, a discount versus a surcharge is really the same thing.
Impending Legal Issues
Vaccination is widely embraced and encouraged by the Centers for Disease Control and Prevention (CDC) but just as the agency lost in United States federal court against the State of Florida statute challenge, they may not hold water. The below are just some of the reasons why a traveler may not become vaccinated and many of those could pose a legal challenge for businesses that disadvantage customers because of it.
Not FDA Approved
While given special permission in the US for release, the FDA has not officially approved the product. The Centers for Disease Control and Prevention (CDC) cannot attest to the accuracy of the claims made and officially, guidance on its federal website does not constitute an endorsement by the CDC.
For those not yet vaccinated, finding a vaccine is easier than ever in the US, but some have reasonable insecurity that the treatment still hasn’t been officially authorized by the Food & Drug Administration.
Some have been advised not to receive the vaccine due to allergic reactions they may encounter, or a variety of other pre-existing autoimmune conditions as advised by their medical professional. Just this week, new warnings were added regarding heart inflammation. That makes an additional class of unvaccinated Americans cautious, at least until the CDC or FDA find new guidance on the matter.
Those who have experienced recovery from COVID-19 may still have antibodies. It’s not known how long the antibodies will last, however, if they have them in their system at the time of the cruise departure, antibodies have been proven to be more effective against COVID-19 infections than any of the current vaccines.
For the discount, however, only fully vaccinated people would be eligible. This would suggest that those who have antibodies are penalized for not taking the vaccine despite current medical guidance; for fully vaccinated travelers who are more at risk, they would be incentivized and welcomed aboard. It ignores the science and increases the risk.
Some religions advise against inoculation. The freedom of religion, awarded in the First Amendment of the constitution, allows members to decline otherwise required inoculations for reasons that align with their beliefs. As such, a Jewish neighborhood in New York was found to be exempt of state-required inoculations for this reason.
If a discount is given for vaccinated travelers, what is to stop businesses (of any kind) from choosing to incentivize other customers based on their health information. Could a business then choose to discount prices for those in better health? What about those that do not have a heart condition? Detractors might say, that’s absurd and it isn’t transmittable, but what about other maladies? What if there was an HIV-negative discount, would that not unfairly discriminate against those who have contracted the virus?
While technically legal in word but perhaps not in the spirit of price discrimination laws, incentivizing travelers based on the voluntary disclosure of their status would open operators up to significant legal questions. Assuming that those who remain unvaccinated are doing so solely for preference ignores medical guidance that states they should not become vaccinated at all. Travel companies who engage in this will likely find more trouble than it is worth.
Lastly, I appreciate the active engagement of our comments section and found it thought-provoking and relevant. The civil discourse on these interesting topics is what opens us up to new ideas, and helps strengthen our opinions on held notions.
What do you think? Is it legal for travel companies to incentivize vaccinated passengers? In so doing do they penalize unvaccinated passengers unfairly?