Airbnb pinged by ACCC for ‘drip feeding’
Major sharing economy company Airbnb has been pinged by the Australian Competition and Consumer Commission (ACCC) for ‘drip feeding’ consumers looking to book stays.
Along with eDreams, Airbnb has been forced to accept undertakings from the ACCC to increase visibility of service and cleaning fees.
Customers seeking to book a room through the Airbnb app are given the headline rate for a room, but not made immediately aware of any subsequent charges such as a service fee or a cleaning fee applied by the room host.
This means the consumer’s expense is incrementally added to before the room is booked, despite being attracted to the room in the first instance by the headline rate.
The undertaking was directed as part of an ACCC crackdown on so-called ‘drip feeding’, a practice where a headline price for a service is incrementally added to instead of being disclosed in the headline rate.
“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 money than they realise,” ACCC chairman Rod Sims said.
“The law does not prevent traders from charging fees,” he added. “However it does require that fees are disclosed clearly to avoid customers being misled.”
Both Airbnb and eDreams cooperated with the ACCC investigation and have accepted the undertakings from the regulatory body.
The ACCC has previously taken airlines Jetstar and Virgin Australia to court alleging their alleged drip feeding practices amounted to misleading or deceptive conduct.
The matters were heard in December last year, with the judgement reserved.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Maven Capital Pty Ltd (AFSL No. 418504). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.