New FTC Rule Targets Hidden Fees in Hotel and Live-Event Ticketing Industries

• The Federal Trade Commission (FTC) announces a new rule prohibiting deceptive pricing practices in the live-event ticketing and short-term lodging industries. 
• The Junk Fees Rule is expected to save consumers significant time and money by requiring businesses to disclose the total price upfront, including all mandatory fees.

In a move aimed at increasing transparency and fairness in pricing, the Federal Trade Commission (FTC) announced a final Junk Fees Rule. This rule targets the deceptive pricing practices prevalent in the live-event ticketing and short-term lodging industries, which include hidden fees that inflate the advertised price. FTC Chair Lina M. Khan emphasized the need for consumers to know the full cost of services upfront, eliminating unexpected costs and facilitating easier comparison shopping.

The rule was developed following an extensive consultation process in 2022 and 2023, during which the FTC received more than 72,000 comments from the public on the impact of hidden and misleading fees. The FTC estimates that the Junk Fees Rule will save consumers up to 53 million hours per year of wasted time searching for the total price for live-event tickets and short-term lodging, equivalent to more than $11 billion over the next decade.

The Junk Fees Rule does not prohibit any type or amount of fee or any specific pricing strategies. Instead, it mandates that businesses disclose the actual total price, including all mandatory fees, whenever they offer, display, or advertise any price for live-event tickets or short-term lodging.

The rule further stipulates that businesses must display the total price more prominently than most other pricing information, and firms that exclude allowable fees upfront must disclose the nature, purpose, identity, and amount of those fees before consumers consent to pay.

The final rule was approved by a 4-1 vote, with Commissioner Andrew Ferguson dissenting. The rule will become effective 120 days after publication in the Federal Register. The FTC has assured that it will continue rigorously pursuing deceptive pricing tactics in other industries as part of its law enforcement authority.