The Federal Trade Commission (FTC) has announced a new rule that will prevent hotels, ticketing companies, and short-term rental services from adding hidden fees to their prices. Starting Tuesday, the rule requires that all pricing information, including additional fees, be clearly displayed before consumers finalize their purchases, ensuring transparency.
FTC Chair Lina Khan emphasized that consumers should know the full price upfront without worrying about unexpected charges at checkout. She added that the new rule would eliminate hidden fees related to hotel bookings, live event tickets, and vacation rentals, saving Americans both money and time.
The final rule does not restrict how much businesses can charge for products or services. Instead, it mandates that businesses display the total price, including all additional fees, in a more prominent manner than other pricing details.
The rule was approved with bipartisan support from the FTC commissioners, with Andrew Ferguson, President-elect Donald Trump’s choice to replace FTC Chair Lina Khan, being the only dissenting vote.
Ferguson, currently a commissioner at the FTC, explained that his vote against the rule was not based on its content, but rather his belief that the Biden administration’s FTC should refrain from issuing new rules following Trump’s election victory.
Andrew Ferguson, a commissioner at the FTC, expressed his dissent over the final rule, stating that the Biden-Harris administration’s time for rulemaking should be over. He argued that the “lame-duck” commission should refrain from issuing new regulations. Ferguson clarified that his vote against the rule was not a reflection of its content, but his belief that the regulatory process should be paused following the election of President Trump.
With the rule’s approval, the FTC now has the authority to impose financial penalties on short-term rental and live-event ticketing companies that fail to disclose their full pricing upfront. The rule is set to take effect 120 days from Tuesday, well after President Biden’s term ends.
Live Nation, the parent company of Ticketmaster, praised the new rule. The company has already implemented all-in pricing at its venues and festivals and welcomed the industry-wide mandate, ensuring that fans will now see the total price of tickets upfront, no matter where they purchase them.
The rule is part of a broader effort by the FTC under President Biden to address hidden fees, known as junk fees. Over the past three years, the FTC has taken action against companies like Invitation Homes and Vonage for charging these fees. President Biden had expressed his commitment to addressing hidden fees in October 2023 when the initial proposal for the rule was unveiled. During a speech in the Rose Garden, Biden remarked that junk fees burden family budgets and make it harder for people to pay bills.
The FTC estimates that the rule will save consumers up to 53 million hours annually that would otherwise be spent searching for the total price of live-event tickets and short-term lodging. Over the next decade, these time savings could equate to more than $11 billion.
The bipartisan approval of the rule could increase its chances of surviving if it faces challenges under a potential Trump administration. However, other rules issued by the FTC in the past year, such as a ban on noncompete agreements, have been contested in court by business trade associations. If these challenges succeed, the FTC would need to decide whether to appeal, as any rule that is not upheld would not go into effect.