ACCC slaps down Airbnb and eDreams for drip pricing

The Australian Competition and Consumer Commission (ACCC) has found that accommodation sharing services Airbnb Ireland (Airbnb) and Vacaciones eDreams, SL (eDreams) have deceived Australians by obscuring mandatory charges.

The Commission investigated the two companies after consumers complained that compulsory cleaning and service fees were not clearly shown on online accommodation listings.

The ACCC said Airbnb appeared to have been engaged in the deception the longest – since November 2012 – and eDreams from January to December 2014.

Commission Chairman Rod Sims said both companies had: “engaged in misleading and deceptive conduct and made misleading representations by failing to adequately disclose to consumers in Australia particular mandatory fees on key pages of one or more of their online booking platforms.”

Airbnb had “failed to adequately disclose” mandatory service and cleaning fees charged by accommodation hosts on search results pages and accommodation listing pages on its website, mobile site and apps accessible in Australia, said the Commission.

eDreams was accused of not making service and payment fees clear on some of the booking pages of its mobile site and app and failing to show a single price inclusive of mandatory service and payment fees on parts of its website.

Drip pricing is where a headline price is advertised at the start of an online transaction but additional fees and charges, which may be unavoidable for consumers, are then gradually disclosed (or ‘dripped’).

“Drip feeding consumers with information about charges can cause detriment to competition and result in consumers paying a higher price than the advertised price or spending more than they realise,” Mr Sims said.

“The law does not prevent traders from charging fees. However, it does require that fees are disclosed clearly to avoid consumers being misled.”

Both chastised companies have promised to improve their pricing practices to incorporate mandatory fees into the prices displayed on key pages during bookings so consumers get the accurate price up front.

Airbnb will also develop a consumer law compliance program within the company, and eDreams will give staff compliance training focusing on key aspects of Australian Consumer Law.

These matters were raised by the ACCC as part of its commitment to addressing problematic drip pricing practices during online purchasing processes across a number of business sectors including airline, ticketing, and accommodation services.

Online drip pricing is particularly prevalent the airline, ticketing, accommodation and vehicle rental sectors.

The ACCC said consumers should shop around and not just focus on the advertised price, which may not be the cheapest final price.

The Commission said that consumers should be prepared to back out of online transactions where additional charges were starting to stack up, look out for pre-selections and reject anything they did not want to purchase. Double checking bookings before paying was essential too.

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