The Australian Competition and Consumer Commission is sweeping a range of websites and mobile apps for conduct known as ‘drip pricing’, as it joins an international initiative to target online pricing issues in the travel, tourism and leisure sectors.
The web surveillance is part of International Consumer Protection and Enforcement Network (ICPEN)’s annual internet sweep, involving over 50 consumer protection agencies around the world. The ACCC is sweeping a range of websites and mobile apps offering online bookings for services such as flights, accommodation, cruises, ferries, trains, buses, vehicle hire, car parking and entertainment ticketing.
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. Today’s sweep may identify further websites and mobile apps which need to improve their pricing practices,” ACCC Deputy Chair Delia Rickard said.
“If there are additional fees during an online booking process, these fees should be adequately disclosed as early as possible in the process. When all providers of online booking services are truthful and accurate in their pricing representations, consumers can feel more confident in their online and mobile transactions and make informed purchasing decisions.”
Drip pricing remains a focus for the ACCC, as part of the ACCC’s current priority area of systemic consumer issues in the online marketplace.
Consumer tips on drip pricing are available on our website.
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.
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