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ACCC commences proceedings against Airbnb

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Airbnb is a popular online platform that facilitates the arrangement between a property owner looking to rent out their space, and those who are looking for a space to rent.

The platform has become increasingly popular and is generally used by travellers who are looking for a place to stay, hoping to avoid the price point or limitations that might come with staying in a traditional hotel or hostel.

Instead, through Airbnb travellers are able to stay in homes, grand manors, and other unique properties with the option to choose between having the entire place to themselves, sharing common spaces, or even sharing a room.

The allegations

The ACCC has commenced proceedings in the Federal Court of Australia, alleging that Airbnb has made two false and misleading representations about pricing to consumers. They have referred to these as the “AUD Representation” and the “Selection Representation”.

It is alleged that Airbnb displayed a “total” price for accommodation with a dollar sign, falsely representing to consumers in Australia that these prices were displayed in Australian currency. The platform apparently also included the words “Price shown is the total trip price including additional fees and taxes” with no indication as to whether the amount was in AUD or USD. The ACCC allege that given the context of the platform being used in Australia (and having a “.au” suffix), as well as relating to booking accommodation in Australia, consumers were led to believe that they would be charged in AUD. Instead, after repeatedly being shown the “total” without any indication as to the currency, even after confirmation of the booking, consumers found that they had been charged in USD instead of AUD, and often were charged an additional conversion fee by their financial institution. This is what has been referred to as the “AUD Representation”.

After this happened, some customers attempted to raise a complaint in relation to being charged in USD rather than AUD, and it is alleged by the ACCC that Airbnb’s staff would inform those customers that they had been charged in USD because they had selected USD as their currency. This argument was then allegedly relied on by Airbnb staff in disputing any entitlement to compensation for the difference in price or extra costs incurred, despite this being a misrepresentation as those customers had not actually selected this currency option. This is what has been referred to as the “Selection Representation”.

What now?

The ACCC is seeking many different forms of relief including compensation for affected customers, as well as financial and legal penalties. The matter is yet to be listed for hearing, so at this stage only time will tell what the outcome will be.

However, if past cases are anything to go by, the ACCC appears to be pursuing high-profile companies within the travel industry, which may mean a hefty penalty should the Court find that Airbnb did in fact make false and misleading representations to consumers.

Airbnb previously provided the ACCC with an undertaking that is enforceable by the Court relating to pricing displayed on its website and apps, after a failure to disclose additional fees and comply with Australian Consumer Law in relation to single price specification requirements in 2015. The ACCC have stated that there is no suggestion that this undertaking has been breached, however it is likely that the Court will consider whether or not it is relevant to the current matter, which may impact the outcome for Airbnb.

Airbnb have apparently committed to refunding affected users and are investigating how the AUD Representation and Selection Representation occurred to begin with.

The Airbnb platform has since been updated as well, with prices now displayed alongside their listed currency.

What does this mean for me?

This is yet another reminder of the strong consumer protections we have in Australia. If you operate a business, it is crucial that you exercise caution and seek legal advice in relation to the services you provide and the representations that you make to the public.

Have a question? McCabes is experienced in advising and representing clients in all consumer law matters, including misleading and deceptive conduct. Please reach out to our Litigation and Dispute Resolution Group if you have a matter that you need help with.

Contributors

Nathan Jones
Special Counsel
Saliha Rafiqi​​
Lawyer

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