Airbnb to pay $15m in penalties and up to $15m compensation for misleading consumers

London, UK - July 31, 2018: The buttons of the travel app Airbnb, surrounded by Amazon, ebay, News and other apps on the screen of an iPhone.
Edited by Travel Weekly


    The Federal Court has ordered Airbnb Ireland UC (Airbnb) to pay $15 million in penalties, and Airbnb will offer up to $15 million in compensation to eligible consumers, after Airbnb admitted it misled consumers about the currency of the prices on its accommodation platform.

    Airbnb admitted making false or misleading representations to Australian users between January 2018 and August 2021 that prices for Australian accommodation were in Australian dollars, when in fact for about 70,000 consumers the prices were in US dollars.

    Airbnb acknowledged that during this period prices were displayed for Australian accommodation on its website with a dollar sign without an indication of whether the price was in Australian or US dollars.

    “Consumers were misled about the price of accommodation, reasonably assuming the price referred to Australian dollars given they were on Airbnb’s Australian website, searching for accommodation in Australia and seeing a dollar sign,” ACCC Chair Gina Cass-Gottlieb said.

    “By paying in US dollars, these consumers were charged more than they expected to pay, and were deprived of a chance to make an informed decision about whether to make the booking because of this misleading conduct regarding the price.”

    “We took this case to send a strong signal to large digital platforms like Airbnb that they must comply with the Australian Consumer Law and not mislead consumers,” Ms Cass-Gottlieb said.

    We are pleased with the undertaking by Airbnb to pay compensation, which provides a meaningful outcome for the affected consumers.

    “Eligible consumers will be contacted by Airbnb within the next 45 days and invited to lodge a claim, but they can also contact Airbnb to ask about their claim if they think they are eligible for compensation and have not been contacted by that date,” Ms Cass-Gottlieb said.

    Airbnb received over 2,000 complaints from Australian consumers raising concerns about being charged in US dollars during the relevant period. With respect to a number of these consumers, the Court found that Airbnb had told them that the consumer themselves had selected for prices to be in US dollars, when in fact some users never made that selection.

    The Airbnb platform was meant to operate so that consumers accessing the platform in Australia who had not manually selected otherwise would be shown prices in Australian dollars.

    However, the platform did not operate in this way for some Australian consumers and some consumers were shown prices and charged in US dollars.

    Airbnb amended its platform and from 31 August 2021 prices in US dollars were clearly denoted through the use of the abbreviation ‘USD’.

    Airbnb has also been ordered to pay part of the ACCC’s costs and establish and maintain an Australian Consumer Law compliance program.

    Consumer redress scheme

    Airbnb has also provided the ACCC with a court-enforceable undertaking under which it will offer compensation to about 63,000 affected consumers who had over 70,000 bookings billed in US dollars. The total value of the compensation scheme could be as much as $15 million.

    “Affected consumers ultimately paid significantly more than they expected to pay because of the prevailing USD/AUD exchange rate at the time. Some users also paid additional charges to their banks as a result of paying in a foreign currency,” Ms Cass-Gottlieb said.

    The compensation Airbnb will provide to affected consumers will be the difference between the price the consumer expected to pay in AUD and the price they actually paid due to the USD/AUD exchange rate, as well as any additional foreign currency transaction fees affected users may have incurred.

    The average compensation payment is expected to be about $230 per consumer.

    The exact amount will vary depending on the cost of their booking, the exchange rate on that date and any charges paid to their financial institution as a result of paying in USD.

    Affected consumers will be contacted by Airbnb and by Deloitte Australia, which is administering the compensation claims program on behalf of Airbnb.

    Consumers will receive an initial communication from Airbnb via email and text message, inviting them to log-on to their Airbnb account, where further information will be available about how they can lodge a claim. Airbnb will contact affected consumers with information about the consumer redress scheme by Monday, 5 February 2024.

    Consumers are warned to be aware of scammers pretending to make contact on behalf of Airbnb or Deloitte. The safest way for consumers to gain access to the Deloitte claims portal is via a link in their official Airbnb account. Consumers should only provide their personal information through the claims portal, and not to anyone else.

    Further information about the redress program is available at Airbnb Ireland UC.

    Background

    Airbnb Ireland is incorporated in Ireland as an unlimited company. It operates the Airbnb website and apps for users in Australia. Airbnb Ireland publishes the content of the booking flow on the Airbnb website and apps to consumers in Australia.

    Airbnb Ireland contracts with consumers in Australia for their use of the Airbnb platform and bookings made through the Airbnb platform, other than in limited circumstances.

    Airbnb Australia Pty Ltd is primarily a marketing entity responsible for promoting Airbnb in Australia, and is not a party to the ACCC’s proceeding.

    Consumer issues relating to digital platforms, and consumer and fair trading issues relating to manipulative or deceptive advertising and marketplace practices in the digital economy, are current ACCC enforcement priorities.

    In June 2022, the ACCC instituted proceedings alleging Airbnb made misleading representations to consumers about the currency for Australian accommodation bookings.

    Email the Travel Weekly team at traveldesk@travelweekly.com.au

    accc airbnb

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