FTC rule on unfair or deceptive fees to take effect on May 12

Original Article ↗ Hacker News Discussion ↗

Scope and limitations of the FTC rule

  • Rule targets bait‑and‑switch and hidden fees only in:
    • Live-event ticketing (concerts, sports, theater, etc.).
    • Short‑term lodging (including hotels, Airbnbs, vacation rentals).
  • Many commenters think the scope is “too limited” and ask why it doesn’t apply to:
    • Pre‑recorded performances (movies, streaming).
    • Cell carriers, cable, airlines, car dealers, restaurants, B2B goods, etc.

Live events vs. movies and pre‑recorded content

  • One argument: harm is worse for unique live events where there’s no real substitute; you either pay the inflated fees or miss the show.
  • Pre‑recorded content is seen as more “fungible”: you can wait, switch venues, or choose another movie.
  • Others push back: this just means hidden fees for fungible products are being tacitly endorsed, which still only benefits companies.
  • Some suggest movie theaters haven’t (yet) engaged in fee abuse at the same level, so they escaped regulation; others think industry lobbying explains the carve‑out.

Short‑term lodging: hotels vs. platforms

  • Rule explicitly covers hotels and short‑term rentals (Airbnb/VRBO‑style).
  • Common abuses cited: “resort fees,” cleaning fees plus fines for not cleaning, mandatory safe fees, large Airbnb fee stacks that double the nightly rate.
  • Comparisons to Japan and UK/EU: users describe more transparent “price shown = price paid” norms there, versus US “fee surprises” at checkout or check‑out.

Hidden fees in other sectors

  • Commenters want similar rules for:
    • Telecom (vague “recovery” fees not in advertised price).
    • Ticketing more broadly (example: StubHub’s A/B test where hiding fees increased conversions and spend).
    • B2B surcharges (fuel, environmental, hazmat) that obscure unit costs.
  • Some point to the UK’s broad ban on “drip pricing” as proof a general rule is feasible.

Regulatory design, politics, and enforcement

  • Debate over narrow, industry‑specific rulemaking vs. simple broad mandates like “headline price must be the out‑the‑door price.”
  • Some attribute the limited scope to lobbying and regulatory capture; others cite staffing limits and the need for incremental steps.
  • Discussion around the FTC’s independence, changing political oversight, and whether such rules will be weakened or reversed.
  • Several express skepticism about “teeth”: they want to see meaningful penalties before believing behavior will change.

Consumer behavior and responsibility

  • Evidence that consumers say they want all‑in pricing but still buy more when fees are hidden is used to justify regulation.
  • One side argues people should “vote with their wallets” and reward transparent providers; the other notes many consumers live paycheck‑to‑paycheck and can’t easily absorb or research surprise costs, so legal protections are needed.