LYV - Federal Trade Commission proposes new rule to ban hidden and bogus fees

2023-10-11 15:16:02 ET

The U.S. Federal Trade Commission (FTC) on Wednesday said it was proposing a new rule that would ban "junk" or hidden fees charged by businesses from hotels to online concert ticket operators.

According to the FTC, these fees can cost consumers tens of billions of dollars per year in unexpected costs.

"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," the Commission's Chair Lina Khan said in a statement .

The agency last year requested public input on how junk fees affect consumers' personal spending, and received more than 12K comments in response. The FTC is now seeking a new round of comments on the proposed rule.

As per the public comments, such hidden or bogus fees show up for everything from booking hotels and resort fees to buying concert tickets online, renting an apartment, and paying utility bills. A common complaint among consumers was that sellers often do not advertise the total amount they will have to pay, and disclose fees only after the transaction process was well underway

Companies such as Live Nation's ( LYV ) Ticketmaster unit have faced regulatory flak this year on allegations of abusing their power over the live music industry. Last year, Ticketmaster botched a public sale of tickets for Taylor Swift's Eras Tour amid problematic glitches.

"The proposed rule will save consumers more than 50M hours per year of wasted time spent searching for the total price in live-ticketing and short-term lodging alone, according to FTC estimates. This time savings is equivalent to more than $10B over the next decade," the agency said in Wednesday's statement.

More on the FTC

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• Pfizer expected to certify compliance with FTC on Seagen deal in 2-3 weeks - report
• Albertsons drops amid report FTC is likely to challenge Kroger deal
• Amazon vs. the FTC breakdown: Analysts say investors may win either way
• FTC plans to soldier on with in-house case against Activision/Microsoft deal (update)

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