The Federal Trade Commission passed a rule Tuesday, Dec. 17, that will stop “bait-and-switch” tactics when buying concert tickets or booking hotel rooms and other short-term rentals. The new rule may be the final shot in the Biden administration’s fight against junk fees across industries.
According to the FTC, “the Junk Fees Rule requires that businesses clearly and conspicuously disclose the true total price inclusive of all mandatory fees whenever they offer, display, or advertise any price of live-event tickets or short-term lodging.”
The U.S. Chamber of Commerce came out against the rule earlier this year.
The rule is “nothing more than an attempt to micromanage businesses’ pricing structures, often undermining businesses’ ability to give consumers options at different price points,” the group said in February. “To be clear, the U.S. Chamber supports efforts to enhance price transparency … However, the FTC’s proposed rule severely misses the mark.”
Download the SAN app today to stay up-to-date with Unbiased. Straight Facts™.
Point phone camera here
“The proposal would make sure that corporations cannot lure people in with an artificially low price, but then when it’s time to make the purchase, add all sorts of mystery fees that significantly raise the overall cost,” FTC Chair Lina Khan said in April.
But the U.S. Chamber said the FTC’s proposal undermines American free enterprise by replacing “consumers’ ability to pick winners and losers in the marketplace.”
Straight Arrow News reached out to the U.S. Chamber of Commerce for a statement now that the rule has been finalized.
The FTC has had some industry allies, including the ticket sale giant Live Nation Entertainment.
“We’ve led the industry by adopting all-in pricing at all Live Nation venues and festivals and applaud the FTC’s industry-wide mandate so fans will now be able to see the total price of a ticket right upfront no matter where they go to see a show or buy a ticket,” Live Nation told Straight Arrow News in an email.
“We’re pleased to see the FTC mandate the necessary changes to make ticket-buying more transparent for fans so the first price they see is the price they pay,” Ticketmaster added.
Live Nation Entertainment may be in the FTC’s corner on this issue, but it is still facing legal action from the country’s other antitrust enforcer, the Department of Justice, which has accused it of having a monopoly over ticket sales. Live Nation and Ticketmaster merged into Live Nation Entertainment in 2010.
One of the biggest names in short-term rentals is also on board with the FTC rule change. Airbnb implemented a “total price display” on its search results two years ago.
Straight Arrow News also reached out to the American Hotel and Lodging Association for a comment on the new rule but had not heard back at the time of publishing.
This final rule comes in the final weeks of President Joe Biden’s term. He made hidden fees a central point of his administration’s agenda and even used his 2023 State of the Union address to talk about the issue.
“My administration is also taking on junk fees, those hidden surcharges too many companies use to make you pay more,” Biden said in the national address. “We’re making airlines show you the full ticket price up front [and] refund your money if your flight is canceled or delayed; we’ve reduced exorbitant bank overdrafts by saving consumers more than $1 billion [per] year; we’re cutting credit card late fees by 75% from $30 to $8. Junk fees may not matter to the very wealthy, but they matter to most other folks in homes like the one I grew up in, like many of you did. They add up to hundreds of dollars a month.”
It’s unclear what fate the rule will face as President-elect Donald Trump enters the White House next month. The commission passed the rule by a 4-to-1 vote. The only dissenting vote is Commissioner Andrew Ferguson, whom Trump has named to be the next FTC chair.
He wrote that his dissent has “nothing to do with the merits of the Final Rule.”
“I dissent only on the ground that the time for rulemaking by the Biden-Harris FTC is over,” Ferguson said. “This lame-duck Commission should give its regulatory pen a much-needed rest, focus on routine law-enforcement, and prepare for an orderly transition.”
