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

Original Article ↗ Hacker News Discussion ↗

A new FTC rule targeting “junk fees” in live-event ticketing and short‑term lodging is welcomed as a curb on bait‑and‑switch pricing but criticized for being narrowly scoped. Commenters question why similar protections don’t extend to movies, cell carriers, restaurants, and other sectors that rely on drip pricing, pointing to lobbying, regulatory capacity, and the U.S. preference for targeted regulation as key constraints. Comparisons to the UK and EU, where all‑in pricing is broadly mandated, highlight how much further consumer protection against hidden charges could go.

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.