The Federal Trade Commission (FTC) announced on Tuesday that it will soon implement new regulations requiring hotels, vacation rental companies, and event promoters to present all fees upfront when they display prices.
This decision aims to tackle the issue of unexpected extra charges, often referred to as “junk fees,” that consumers encounter after initially seeing a listed price for accommodations or entertainment. These additional fees can include resort fees, cleaning charges, processing costs, and more.
According to FTC Chair Lina Khan, consumers have a right to know the total price they are expected to pay without the anxiety of hidden fees that they have not considered or planned for.
The new rule is set to be enforced in 120 days, bringing significant changes to the pricing transparency landscape.
In response to the announcement, Ticketmaster expressed its support for the forthcoming regulation, stating that it has long championed the idea of comprehensive pricing as a standard across the industry. The company is pleased to see the FTC push for changes that will enhance the clarity of ticket pricing for consumers.
The approval of the rule was not unanimous, with four out of five FTC commissioners voting in favor. Commissioner Andrew Ferguson, nominated by President-elect Donald Trump to succeed Khan, cast the sole dissenting vote.
This new measure mandates that businesses providing lodging and ticketing services must clearly and boldly display the full cost, including all obligatory fees, when presenting any pricing information. If a business does not include taxes or shipping costs in its advertised prices, it must disclose such charges before a customer enters their payment details.
The FTC projects that this initiative could save American consumers approximately 53 million hours annually that would otherwise be spent searching for the actual cost of accommodations or events.
The agency initiated the rule-making process back in 2022 and collected feedback from the public, receiving over 12,000 comments regarding the potential effectiveness of the fee-disclosure policy in reducing unfair pricing practices.
Concerns surrounding junk fees and misleading pricing have also played a role in legal actions taken against Ticketmaster and its parent, Live Nation Entertainment, by the Department of Justice earlier this year. The government has requested a court separation of the two companies, citing a monopoly in concert promotion and ticketing that leads to escalated prices for consumers.
Furthermore, the Biden administration has also focused on curbing fee practices related to U.S. airlines, financial institutions, and online payment services.
