Ah, the sharing economy. We are big supporters of industry disruption in the name of competitive market conditions for consumers but an issue that keeps popping up for these new ventures is non-compliance with Australian laws (*cough* Uber).
Airbnb is the latest to fall foul, and it has given enforceable undertakings to the ACCC in respect of the way it represents prices to consumers.
For the uninitiated (who are you??), Airbnb is a hugely popular platform that allows people to rent out space/a room/their residence to other people. Sounds creepy, we know, but it offers great flexibility for larger groups (e.g. book a French chateau that sleeps 12!) and it’s a generally awesome way to experience your travel destination like a local.
Good things aside, the ACCC took issue with the way the Airbnb platforms failed to disclose mandatory fees to Australian consumers at the initial stage of searching, in a practice known as ‘drip pricing’, where, according to the ACCC, fees and charges are “incrementally disclosed” to the consumer.
Essentially, Airbnb would display an initial price that didn’t include Airbnb’s service fee (or the host’s cleaning fee, if applicable) – these fees were disclosed at a later stage of the process. This meant the actual price to be paid by the consumer was greater than what was initially presented to them, which is a big no-no under the ACL – you know, misleading or deceptive conduct, false representations and all that.
Once the ACCC got onto it, Airbnb agreed to amend its practices and also implement a compliance program to ensure it abides by the ACL. Good corporate citizen, after all.
Some of the fights the sharing economy disruptors are picking with lawmakers are pretty fun to watch and we're backing the law of supply and demand to beat entrenched interests in the end, but in the meantime the new guard need to ensure they're complying with the laws they don't need to break. "Don't mislead consumers" is a big one.