The Australian Competition and Consumer Commission recently swept a range of websites and mobile apps for conduct known as ‘drip pricing’, as part of the International Consumer Protection and Enforcement Network (ICPEN)’s annual initiative involving over 50 consumer protection agencies around the world.
The ACCC swept websites and mobile apps of over 130 traders offering online bookings for services such as flights, accommodation, cruises, trains, vehicle hire, car parking and entertainment ticketing. The aim was to determine whether any of these traders were engaging in misleading or deceptive conduct.
“Results from the ACCC’s sweep last month indicate an improvement in the online booking processes among the travel, tourism and leisure sectors,” ACCC Deputy Chair Delia Rickard has said.
“The sweep identified 15 traders for follow-up action, with ACCC staff finding instances where fees and charges were not adequately disclosed as early as possible in these traders’ booking processes. These fees and charges included compulsory booking fees or credit card surcharges which were not disclosed until the payment stage.”
“Businesses should be mindful of the overall impression created by booking processes, ensuring there is adequate and early disclosure of both compulsory and non-compulsory fees. This is particularly important as more businesses move towards mobile platforms, given mobile websites and apps are constrained in the amount of information that can be clearly conveyed to readers,” Ms Rickard said.
Drip pricing is where a headline price is advertised at the beginning of an online purchasing process and additional fees and charges (which may be unavoidable or applied in most transactions) are then incrementally disclosed (or ‘dripped’). This can result in consumers paying a higher price than the advertised price, spending more than they realise and making it more difficult to compare offers.
Since the ACCC began its work on drip pricing, a number of businesses in the travel, accommodation and ticketing industries have adjusted their online pricing practices to improve disclosure of fees and charges.
The sweep activity complements the ACCC’s broader work in drip pricing, which remains a focus for the ACCC as part of its current priority area of systemic consumer issues in the online marketplace.
Consumer tips on drip pricing are available on our website.
Background
On 17 November 2015, the Federal Court found that Jetstar Airways Pty Ltd (Jetstar) and Virgin Australia Airlines Pty Ltd (Virgin) had engaged in misleading drip pricing practices. The Court found that representations about specific advertised airfares made on Jetstar and Virgin’s mobile websites in 2014, as well as Jetstar’s 2013 website, were false or misleading.
On 13 October 2015, the ACCC accepted court enforceable undertakings from Airbnb Ireland (Airbnb) and Vacaciones eDreams, SL (eDreams) following concerns that the companies engaged in misleading and deceptive conduct and made misleading representations by failing to adequately disclose to consumers in Australia particular mandatory fees on key pages of one or more of their online booking platforms.
In late 2014, in response to concerns raised by the ACCC, Ticketek and Ticketmaster agreed to improve their online pricing practices. The ACCC had identified instances where it considered that these companies failed to state single minimum total prices. Both companies now include unavoidable fees earlier in the online booking process.
The ICPEN Sweep is in its 17th year. ICPEN is made up of consumer protection authorities from over 50 countries and its main objective is to protect consumers’ interests around the world and share information about cross-border commercial activities that may affect consumers.