Airbnb is facing fresh regulatory pressure in Europe. But this time it’s not about the short-term home rental platform’s core business model—it’s about its terms and conditions, and the way the company presents pricing to consumers.
On Monday, the European Commission and a number of EU consumer watchdogs accused Airbnb of breaking consumer law. If the company does not change the way it operates by the end of August, then it could face legal action.
Specifically, the regulators said Airbnb must show people total prices up-front that include all charges and fees, and it must clearly tell customers whether a property is being offered by a private host or a professional.
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The American company’s terms and conditions are illegal under EU law for a variety of reasons, the regulators added. For example, the company tells people in the EU that they cannot sue a host in cases of personal harm or other damages, and it claims it can unilaterally change its terms and conditions without giving customers a warning and the option of cancelling their contracts. These sorts of terms might fly in the U.S., but they’re banned in Europe.
“More and more consumers book their holiday accommodation online and this sector has brought many new opportunities to holidaymakers. But popularity cannot be an excuse for not complying with EU consumer rules,” said Vera Jourova, the EU consumer affairs commissioner. “Consumers must easily understand what for and how much they are expected to pay for the services and have fair rules e.g. on cancellation of the accommodation by the owner. I expect Airbnb to follow up swiftly with the right solutions.”
If Airbnb does not propose “detailed solutions” on fixing the problems by the end of next month, there will be a meeting between the company and the regulators in September. If the regulators are still not happy with the outcome, then they “could decide to resort to enforcement measures,” they said.
“We take this issue seriously and are committed to being as transparent as possible for our community,” Airbnb said in a statement. “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 usually has trouble in the EU regarding its model of letting regular people rent out rooms or whole properties on a short-term basis. The company has had to impose limits on these rentals to appease the authorities in cities such as Barcelona, Berlin and London, where people are concerned about the model raising prices for long-term renters.