From Taylor Swift’s Eras Tour to Airbnbs in an expensive city, junk fees are everywhere and ruining our attempts to have fun. The Federal Trade Commission is proposing a new rule that would force businesses like ticket marketplaces and hotels to clearly list all the fees they’ll wind up charging customers.
The FTC announced the new rule this morning in a press release. The proposal would require businesses to list all fees associated with a transaction upfront, so customers are not surprised by them at checkout. The commission argues that surprise fees cost consumers tens of billions of dollars every year in purchases like renting an apartment, paying for utilities, buying concert tickets, or booking a hotel. The proposed rule hardly bans junk fees, despite the FTC claiming otherwise—it just forces companies to make customers immediately aware of those junk fees. However, the new rule could incentivize businesses to compete with each other for the lowest price. The FTC is seeking comments from the public on the new proposal.
“All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year—money that corporations are extracting from working families just because they can,” said FTC Chair Lina M. Khan in the release. “By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive.”
While junk fees have been annoying concertgoers, travelers, and sports fans alike for years, the issue truly came to a head in the public consciousness last fall. After singer-songwriter Taylor Swift announced her highly anticipated first tour in five years, dubbed The Eras Tour, Ticketmaster crashed as Swifties flocked to the tour’s presale. While Ticketmaster outages were understandably enraging for fans, many Swifties were also dismayed by the excessive ticket prices—a jarring portion of those prices were comprised of excess fees.
During a Senate hearing following The Eras Tour presale madness, Live Nation Entertainment President and CFO Joe Berchtold testified that the company has done nothing but improve the artist-fan relationship since Live Nation and Ticketmaster merged in 2010. Berchtold further claimed that Ticketmaster does not set prices, does not decide how many tickets go on sale, and does not set service fees. He also shifted the blame from Ticketmaster and claimed that outages during The Eras Tour were caused by those damn bots.
In June, President Joe Biden hosted executives from Live Nation Ticketmaster, Airbnb, xBk, DICE, TickPick, Wisconsin’s Pablo Center at the Confluence, and Rhode Island’s Newport Festivals Foundation at the White House to break bread over ticketing fees. At the meeting, Live Nation Ticketmaster announced all-in pricing, which would allow the customer to see the entire price of a live event ticket before even adding it to their cart. SeatGeek plans to rollout out a similar all-in pricing tool while Airbnb unveiled a total price view last November, with a release last December. While companies like Live Nation Ticketmaster and Airbnb decided to play ball after being confronted by Biden, the FTC’s new rule would force the hand of businesses across the board to opt-in to the attempt at transparency.