FTC Enforces Rule Banning Hidden Fees on Live Event Tickets and Short-Term Rentals
The Federal Trade Commission (FTC) has implemented the final Unnecessary Fees Rule aimed at banning deceptive pricing and hidden fees in the live event ticketing and short-term rental sectors. This rule is designed to protect consumers from unfair pricing practices and to promote fair competition among businesses.
The rule, which targets bait-and-switch pricing tactics, was announced by FTC Chair Lina M. Khan. Khan emphasized that consumers have the right to know the total cost of a service or product without the concern of unexpected fees. The rule will help eliminate hidden fees associated with live event tickets, hotels, and vacation rentals, potentially saving Americans billions of dollars and preventing millions of wasted hours.
The Unnecessary Fees Rule will ensure that pricing information is presented to consumers transparently, accurately, and in a timely manner. It aims to eliminate surprise fees that often inflate the advertised price of hotels, vacation rentals, and live event tickets. By requiring the total price, inclusive of all fees, to be disclosed upfront, the rule makes it easier for consumers to compare prices and creates a fair competitive environment for businesses.
The rulemaking process began in 2022 when the FTC sought public input on whether such a rule could help eliminate unfair pricing tactics. After receiving over 12,000 comments, a proposed rule was announced in October 2023, followed by a second round of comments. The development of the final rule considered over 60,000 additional comments.
The FTC estimates that the Unnecessary Fees Rule will save consumers up to 53 million hours annually, equating to more than $11 billion over the next decade. This time savings is based on the duration consumers spend searching for the total price of live event tickets and short-term rentals.
The final rule specifically targets certain deceptive pricing practices in live event ticket sales and short-term rentals. It does not prohibit any type or amount of fees or specific pricing strategies. Instead, it requires businesses to honestly disclose the total price, inclusive of all mandatory fees, in their advertisements.
Additionally, the rule mandates that businesses display the total price more prominently than other pricing information. Companies that exclude specific fees from their advertised price must clearly disclose these fees before consumers provide payment information.
The FTC will continue to enforce laws banning deceptive pricing tactics in sectors beyond live event ticketing and short-term rentals. The final rule was approved with a 4-1 vote, despite opposition from Commissioner Andrew Ferguson, and will take effect 120 days after being published in the Federal Register.
The FTC is dedicated to promoting competition and protecting and educating consumers. It encourages consumers to report fraud, deception, or unfair business practices at ReportFraud.ftc.gov.