Why is Airbnb in hot water with the European Commission?

17 Jul 2018

Airbnb app on mobile device. Image: East Pop/Shutterstock

Airbnb could face EU sanctions if it doesn’t become more transparent about its pricing.

Airbnb is an increasingly popular accommodation option for holidaymakers in the EU and around the world, but European regulators say the company is not providing enough transparent information to customers when it comes to pricing.

EU commissioner for justice, consumers and gender equality, Věra Jourová, explained that although Airbnb is a popular service, that same popularity “cannot be an excuse for not complying with EU consumer rules”. She added: “Consumers must easily understand what for and how much they are expected to pay for the services and have fair rules, eg on cancellation of the accommodation by the owner.”

At the moment, the way Airbnb presents its pricing and a number of its terms does not comply with the Unfair Commercial Practices Directive, the Unfair Contract Terms Directive, and the Regulation on the Jurisdiction in Civil and Commercial Matters.

As a result, the European Commission is making a number of demands, on which it has placed a compliance deadline of the end of August. If the changes are not made by the company, an enforcement action will be on the cards.

Airbnb needs more clarity on pricing

Airbnb’s pricing presentation as well as the current distinction between private and professional hosts is in violation of EU law, particularly the Unfair Commercial Practices Directive.

To remedy this, it needs to modify how it presents pricing information from the initial website search to ensure the customer sees the total price, inclusive of cleaning or services charges. Where the total final price cannot be calculated ahead of time, a notice clearly informing the user that additional fees could apply needs to be added.

Consumer protection rules in the EU also say that the host’s status as a private individual or professional needs to be flagged.

More transparent terms and conditions

The EU is pushing Airbnb to alter its terms of service so certain protections are added, such as legal rights that users have to sue a host in case of personal harm.

The company cannot change terms without informing customers in advance and its refund policy also needs clarification. It is also being asked to amend certain elements of its cancellation and contract termination policies.

Airbnb said: “We take this issue seriously and are committed to being as transparent as possible for our community. Guests are made aware of all fees, including service charges and taxes, prior to confirming their decision to book a listing, and we will work together with the authorities to clarify the points raised.”

Airbnb app on mobile device. Image: East Pop/Shutterstock

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects