Very recently the Federal Trade Commission (FTC) proposed a major new regulation designed to improve pricing transparency for consumers. The regulation was due to go into effect on May 12. It prohibits undisclosed service charges related to in-person entertainment, lodging, and other temporary occupancy arrangements. This new rule goes far beyond preventing the worst main companies. The change now expands to third-party platforms, resellers, and travel agents, yielding a powerful new tool for advocating honest pricing in these industries.
The regulation rollout took place at a TechCrunch Disrupt event in Berkeley, California, on June 5. Industry stakeholders from across the country had convened there to talk about trends in the market and the regulatory environment. The FTC took this action in response to growing complaints about “bait-and-switch pricing.” This practice often creates confusion and misleads consumers about the true price of services.
To help businesses meet these new standards, the FTC has released an in-depth guide. This frequently asked questions document explains what’s happening with pricing transparency and what you need to know as one of the many stakeholders impacted. The business-specific guide is meant to help businesses comply and avoid making mistakes when the new rules go into effect.
The rule aims to crack down on opaque fees on various services. The rule for live events is complete and full transparency of all fees disclosed up front. This policy assures there are no unanticipated charges for registrants when they make their purchase. Hotels and short-term rental properties should be upfront about their prices. The basic assumption for this pricing is that it encompasses the overall cost of lodging, including all relevant charges, taxes and fees.
Lauren Goode Lauren is a senior reporter at TechCrunch, where she covers media, streaming, apps and platforms.
Consumer protections
Competitive harms
She emphasized how this regulation would harm consumers, and in turn, businesses. She discussed the need for the FTC’s initiative to protect consumers. This important next step will make sure that hidden costs don’t steer them wrong while they are making their purchases.
“This regulation aims to tackle bait-and-switch pricing that has plagued consumers for years.” – FTC representative
The FTC’s regulation is a step in the right direction, a harbinger of a renewed commitment to consumer protection and fair business practices. The agency takes issue with third-party platforms and resellers. This levels the playing field, enabling consumers to better navigate the marketplace and make choices that benefit them without fear of last-minute or hidden fees.
