Airbnb given ultimatum over lack of price transparency

The EU has accused Airbnb of failing to comply with its rules on price transparency and has given the accommodation website until the end of August to find a solution or face enforcement action.

The European Commission (EC) this week admonished the San Francisco-based company for the way it initially presents the cost of a night’s accommodation without cleaning and service charges included. Users are only told of the additional fees when they have input their dates for booking.

It also said Airbnb must clearly show whether the accommodation listing is a private or professional host, as consumer protection rules differ accordingly.

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Vera Jourova, commissioner for justice, consumers and gender equality, said the popularity of online booking platforms “cannot be an excuse for complying with EU consumer rules”.

“Consumers must easily understand what for and how much they are expected to pay for the services and have fair rules e.g. on cancellation of the accommodation by the owner,” she said. “I expect Airbnb to follow up swiftly with the right solutions.”

Airbnb, founded in 2008, today has more than 3 million listings in 191 countries.

A spokesperson for company said: “We take this issue seriously and are committed to being as transparent as possible for our community. Guests are made aware of all fees, including service charges and taxes, prior to confirming their decision to book a listing, and we will work together with the authorities to clarify the points raised.”

The European Commission, in action coordinated by Norway but representing all member states, said Airbnb does not comply with the Unfair Commercial Practices Directive, the Unfair Contract Terms Directive and the regulation on the jurisdiction in civil and commercial matters.

The EC said in a statement that it had “demanded from Airbnb a number of changes... The company has until the end of August to present their proposals. Once Airbnb proposes solutions to rectify this, the Commission and the EU consumer authorities will review the proposed changes. If they are not considered satisfactory, Airbnb could face an enforcement action.”

The EC also said that Airbnb’s terms of service need to be brought into conformity with EU law, adding that the company cannot “deprive consumers from their basic legal rights to sue a host in case of personal harm or other damages”.

The EU ultimatum is separate from an investigation being conducted by the UK government’s Competition and Markets Authority (CMA) into the behaviour of hotel booking websites.

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The watchdog has said it has “widespread concerns” about how booking sites display costs in an up front and transparent manner, as well as the practise of pressure selling, involving claims of how many people were looking at the same room, how many rooms were left or how long a deal would be available.

A spokesperson for CMA said the investigation was ongoing and that the names of any sites would not be revealed until a later date. The spokesperson would not comment as to whether Airbnb was one of the websites involved.