ACCC Targets “Drip Pricing”: Airbnb And eDreams Give Undertakings
The ACCC today advised that it has accepted the undertakings from Airbnb and eDreams “following concerns that the companies made online price representations to consumers in Australia that were in breach of the Australian Consumer Law (ACL)”.
The matters were raised by the ACCC as part of its commitment to addressing drip pricing practices during online purchasing processes across a number of business sectors.
Drip pricing refers to when “a headline price is advertised at the beginning of an online purchasing process and additional fees and charges (which may be unavoidable for consumers) are then incrementally disclosed (or ‘dripped’)”.
“The ACCC considers that Airbnb, since November 2012, and eDreams, from January to December 2014, 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,” the ACCC stated.
The matters relate to occasions where Airbnb “failed to adequately disclose” a mandatory service fee and also a cleaning fee, where applied by an accommodation host, on its website, mobile site, and apps accessible in Australia search results pages and accommodation listing pages.
The ACCC considers eDreams “failed to adequately disclose its mandatory service fee and payment fee on certain booking pages of the eDreams mobile site and app”, and “on particular pages of its website, failed to comply with the requirement to specify a single total price inclusive of the mandatory service fee and payment fee, in circumstances where those fees were quantifiable at the time of the price representations”.
“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,” ACCC chairman Rod Sims stated.
“The law does not prevent traders from charging fees. However, it does require that fees are disclosed clearly to avoid consumers being misled.”
The ACCC advised that both Airbnb and eDreams have acknowledged the ACCC’s concerns, cooperating with the ACCC during its investigation, with both companies having separately undertaken to improve their pricing practices, with mandatory fees to be incorporated into prices displayed, or otherwise disclosed, on key pages during the booking flow.
Airbnb has undertaken to establish and maintain a consumer law compliance program within the company, with eDreams undertaking to ensure appropriate staff receives compliance training focusing on key aspects of the ACL.