Hidden ticket fees and vacation rental charges banned in America

(CNN) — The Federal Trade Commission announced a final rule banning hotels and ticketing and short-term rental companies from including hidden junk fees in their total price on Tuesday.

Rather than consumers getting hit with “convenience” or “service” fees for hotel bookings and concert tickets at checkout, the FTC said its new rule will ensure that pricing information is presented transparently before consumers agree to pay.

“People deserve to know up-front what they’re being asked to pay — without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina Khan in a statement announcing the rule. “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time.”

The final rule does not limit what sellers can charge for a product or service. Instead, it requires businesses to display the total price, including all additional fees, more prominently than other pricing information.

The rule was approved with bipartisan support among the commissioners of the FTC. Andrew Ferguson, President-elect Donald Trump’s pick to replace Khan as FTC chair, was the sole dissenter.

In a statement, Ferguson, who currently serves as a commissioner of the FTC, said that his decision to vote against the rule had nothing to do with its merits, but, rather, that he believed that President Biden’s FTC should no longer issue new rules in the wake of Trump’s election win.

“I dissent only on the ground that the time for rulemaking by the Biden-Harris FTC is over,” Ferguson said. “This lame-duck Commission should give its regulatory pen a much-needed rest.”

“My vote… should not be understood to state my position on the Final Rule’s merits, or on whether the Commission under President Trump should enforce the Final Rule,” Ferguson added.

With the final rule’s approval, the FTC will have the power to impose financial penalties on short-term rental and live-event ticketing companies that don’t disclose their full price to consumers up-front. The new rule is set to take effect 120 days after Tuesday’s announcement, well after Biden has left office.

Live Nation, the owner of Ticketmaster, the largest concert ticketing company in the US, commended the FTC’s new rule in a statement.

“We’ve led the industry by adopting all-in pricing at all Live Nation venues and festivals and applaud the FTC’s industry-wide mandate so fans will now be able to see the total price of a ticket right upfront no matter where they go to see a show or buy a ticket,” the company said.

The new rule is part of a broader effort by the FTC under Biden’s administration to combat junk fees. In the last three years, the FTC has announced actions against companies like Invitation Homes and Vonage for charging consumers junk fees.

Biden spoke of his intention to crack down on hidden fees in October 2023, when the FTC unveiled the rule’s initial proposal.

“Folks are tired of being taken advantage of and played for suckers,” Biden said during remarks in the Rose Garden at the time. “These junk fees can add hundreds of dollars weighing down family budgets, making it harder to pay family bills.”

In Tuesday’s announcement, the FTC said it estimates the junk fees rule will save consumers up to 53 million hours per year of time spent searching for the total price of live-event tickets and short-term lodging, estimating that the time savings would be equivalent to more than $11 billion over the next decade.

Given that this latest junk fees rule was passed on a bipartisan basis, that may improve its chances of staying on the books during the Trump administration. But there have been other rules that the FTC has finalized in the past year — including a ban on noncompete agreements — that have been challenged in court by business trade associations. When those groups prevail, the question will be whether the FTC elects to seek an appeal. If it does not, any rule in question would not take effect.