Airbnb misled customers on pricing: ACCC
Airbnb could be forced to repay millions of dollars to Australian customers as well as pay millions more in fines after the ACCC accused the accommodation giant of not making it clear that some prices on its platform were in US dollars.
The competition regulator alleges San Francisco-based Airbnb misled thousands of Australian customers over the pricing of Australian accommodation offered on its platform over a period of almost four years.
It alleges that between at least January 2018 and August 2021, Airbnb displayed prices on its website or mobile app for Australian accommodation using only a dollar sign ($), without making it clear that those prices were in US dollars.
Given the average Australian dollar to US dollar exchange rate was about 72¢ between January 2018 and August 2021, it meant that in some cases a customer paid 40 per cent more than they expected.
“We allege that Airbnb’s misleading conduct meant that consumers were deprived of the opportunity to make an informed choice about whether, and at what price, to book their holiday accommodation on the Airbnb platform,” ACCC chair Gina Cass-Gottlieb said.
“In addition to paying higher prices than expected, some consumers who were charged in US dollars also found themselves further out of pocket through currency conversion fees charged by their credit card provider.”
The ACCC also alleges that Airbnb engaged in further misleading or deceptive conduct by telling many of those who complained that the platform had displayed prices in US dollars because the user had selected this currency, when this was often not the case.
The ACCC is seeking declarations, injunctions, pecuniary penalties, orders for the compensation for affected consumers, costs, and other orders.
“By taking this action, we are stating very clearly that digital platforms like Airbnb need to ensure the accuracy of all statements that may affect consumers’ purchasing decisions,” Ms Cass-Gottlieb said.
A spokesman for the ACCC told The Australian Financial Review it first contacted Airbnb in July 2021 about the misleading pricing allegations and that the conduct ceased in August 2021.
It’s not the first time Airbnb, which has a market cap of US$78.2 billion ($108b), has clashed with the ACCC over price disclosures to Australian consumers
In 2015, the competition and consumer watchdog accepted court enforceable undertakings from Airbnb and online travel agency eDreams over allegations of “drip pricing” were additional fees are not disclosed in the headline price, but incrementally added – a practice in breach of the Australian Consumer Law.
The company has also been accused of driving up the cost of traditional rental properties as landlords have taken properties out of the long-stay rental pool to make more money by offering them as short-stay holiday accommodation.
During the pandemic, the opposite occurred in some regions, as owners pulled properties off the Airbnb platform to offer them as long-stay retreats.
In addition, the hotel industry have called for greater regulation of Airbnb and other short-term booking platforms to level the playing field, a lobby which has seen some rules put in place, such as restricting the number of days a property can be rented out as short-stay accommodation in NSW.
In its latest action, the ACCC said on some occasions Airbnb referred to the price as ‘USD’ in small font on the last page of the booking process.
However, this happened only after the platform had already displayed numerous dollar amounts on earlier pages, without nearby reference to US dollars, and after the consumer had clicked to ‘reserve’ their accommodation.
“Airbnb did not compensate many consumers who complained about this conduct, and so we will be arguing that the court should order Airbnb to compensate people who were misled about the price of their accommodation,” Ms Cass-Gottlieb said.
“Despite thousands of consumers complaining to Airbnb about the way prices were displayed, Airbnb didn’t amend its booking platform until after the ACCC raised the issue,” she added.
Airbnb Australia was contacted for comment.
While the number fluctuates as people add and withdraw their properties from the short-term rental pool, there are as many as 350,000 Airbnb listings in Australia.
Initially founded Brian Chesky, Joe Gebbia and Nathan Blecharczyk as a place for people to rent out spare rooms in their homes, Airbnb now includes whole properties available for short-term rent such as houses, apartments and hotel rooms.
The company makes its money by earning a small commission on each booking.
