Airbnb and eDreams act to repair the drip before the water deepens

Published On 20/10/2015 | By Rachel Loftus | Consumer protection, Enforcement

The ACCC has accepted court enforceable undertakings from Airbnb Ireland (Airbnb), a subsidiary of Airbnb Inc., and Vacaciones eDreams, SL (eDreams) following concerns about online price representations made to consumers in Australia. It’s an interesting enforcement action, not only because it targets two large well known overseas based global businesses in the online world and demonstrates the ACCC’s willingness to settle some matters by way of an undertaking only, but because it reinforces that ‘drip pricing’ is still on the regulator’s hit list so business should take care in how pricing is presented on their websites.

The ACCC has been particularly concerned with ‘drip pricing’ practices in recent years, having pursued some airlines and ticketing agencies. ‘Drip pricing’ is the incremental disclosure of fees and charges over an online booking process. It remains a focus for the ACCC as part of its current priority area of emerging systematic consumer issues in the online marketplace.

In this case, the ACCC considered that for approximately three years there were occasions where Airbnb failed to adequately disclose a mandatory service fee (charged by Airbnb and calculated based on the length of the stay) and a cleaning fee (where charged by the accommodation host) on search results pages and accommodation listing pages on its website, mobile site and apps accessible in Australia. In fact, on the search results page, none of the listings displayed the service fee and, where a customer had not entered their preferred check-in and check-out dates, no cleaning fee was displayed. On the accommodation listing page, where a customer had not entered their check-in and check-out dates, Airbnb did not disclose the service fee or any applicable cleaning fee. Consequently, the price displayed in the first instance for each listing was less than the actual price payable per night, which was only displayed at some subsequent point.

The ACCC was similarly concerned that for approximately two years the price for some domestic flights displayed on eDreams’ mobile site and app after the consumer selected their origin, destination and travel dates was the actual, total price payable and that the flight could be purchased at that price. In fact, customers were also subject to both a mandatory service fee (based on the route selected) and payment fee (variable depending on the payment method chosen) on top of the initially displayed price.

The ACCC was of the view that the conduct of Airbnb and eDreams was likely to mislead or deceive consumers in contravention of section 18 of the Australian Consumer Law (ACL) and that both companies also made false or misleading representations with respect to price of services in contravention of section 29(1)(i) of the ACL.

Further, the ACCC considered that eDreams made component pricing representations by failing to specify a single total price for some domestic flights on its website, contrary to section 48 of the ACL, when it displayed a headline price that did not include the applicable service fee and payment fee, which were quantifiable at the time.

Airbnb and eDreams have acknowledged the ACCC’s concerns and cooperated with it during its investigation. Each company has provided court enforceable undertakings to improve their price disclosure practices to ensure mandatory fees are incorporated into accommodation and flight prices displayed on key pages during the booking process, so customers are given accurate pricing information “up front”.  Airbnb has also undertaken to implement a compliance program and eDreams has undertaken to appoint a director or senior manager as its compliance officer.

Photo credit: / Flickr

About The Author

is a solicitor in the Melbourne office at King & Wood Mallesons.

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