Airbnb fined $15 million for misleading thousands of customers into paying higher prices for years

Airbnb fined $15 million for misleading thousands of customers into paying higher prices for years
  • PublishedDecember 20, 2023

The Australian Competition and Consumer Commission (ACCC) took the global tech giant the Federal Court in June last year, alleging Airbnb had tricked customers into paying for their accommodation booking with US dollars.

The ACCC alleged that between January 2018 and August 2021, Airbnb displayed prices to Australian users in US dollars without making it clear to customers, resulting in them being charged a higher price for accommodation compared to what was listed on the platform.

Airbnb said customers had agreed to be charged in US dollars because the abbreviation “USD” was written in tiny font at the final stage of the booking process.

At the time, the Australian dollar was worth about 72 US cents — meaning a customer who thought they were paying $500 for a booking would have paid almost $700, before any currency conversion fees.

On Wednesday, Justice Shaun McElwaine ruled that conduct — known as “AUD Representation” — was deceptive and misled customers, and was therefore in breach of Australia’s consumer law.

“In making the AUD representation, Airbnb engaged in conduct that was misleading or deceptive or likely to mislead … contrary to Australian consumer law,” Justice McElwaine said.

Airbnb was also found to have engaged in “selection representation” by falsely claiming some customers had given their approval to be charged in US dollars.

Justice McElwaine ruled that Airbnb must pay a $15 million fine for breaching Section 244 of the Australian Consumer Law, and pay the ACCC’s costs of $400,000.

Details about compensation for affected customers were suppressed by the Federal Court “to prevent prejudice to the administration of justice”.

However, the ACCC confirmed on Wednesday afternoon that Airbnb would offer compensation to around 63,000 affected customers who made more than 70,000 bookings in US dollars.

The ACCC estimates that the total value of the compensation scheme could be as high as $15 million, with affected customers receiving around $230 each, depending on their booking cost, the exchange rate, and any additional charges.

Last year, Airbnb’s country manager for Australia and New Zealand, Susan Wheeldon, told the ABC the online accommodation platform would fully compensate all affected customers.

In response to the Federal Court decision, Ms Wheeldon said Airbnb would honour its commitment to compensate customers, estimating it would cost the business about $15 million.

“Ensuring our guest community is able to book with confidence and enjoy a positive travel experience is our top priority and at the heart of everything we do, and we have worked constructively with the ACCC throughout this process,” she said in a statement.

“While only a very small percentage of Australian guests are believed to have been impacted, we are disappointed that this happened.

“Airbnb would like to apologise to those guests.”

Details about whether there was a potential breach of a previous undertaking have also been suppressed, meaning only those involved in the case and court staff will have access to them.


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