The Federal Trade Commission (FTC) has approved a new rule aimed at eliminating junk fees—those unexpected, hidden charges added to hotel bookings, event tickets, and vacation rentals. While the rule promises a more transparent pricing system, its implementation will not occur until after the current administration, led by President Biden and FTC Chair Lina Khan, has ended.
Fighting Deceptive Pricing Tactics
On Tuesday, the FTC announced a final rule targeting unfair pricing practices in live-event ticketing and short-term lodging. This rule mandates that businesses disclose the full price upfront, including all mandatory fees, before consumers reach the final stage of a transaction.
The aim is to stop “bait-and-switch” pricing, a common practice where additional costs—such as service, resort, and convenience fees—are revealed at the last minute, inflating the original advertised price. The new rule ensures that consumers no longer face surprises when booking hotels, tickets, or vacation rentals.
FTC Chair Lina Khan emphasized the rule’s significance, stating, “People deserve to know up-front what they’re being asked to pay—without worrying about mysterious fees they haven’t budgeted for.” The rule is expected to save consumers billions by making price comparisons easier and reducing the time spent searching for hidden charges.
Consumer-Friendly Pricing Transparency
The rule focuses on live-event ticketing and short-term lodging—two industries with a history of opaque pricing. Now, businesses must display the total price of a service, including all mandatory fees, in a clear and prominent manner. This ensures that consumers are not misled by lower advertised prices that are ultimately inflated by undisclosed charges.
To further enhance transparency, businesses must display the total price more prominently than other details, such as itemized fees. While itemized breakdowns are allowed, the total price must take center stage, ensuring consumers are aware of the true cost from the start.
A Long Journey to Implementation
The rule’s development began in 2022 when the FTC requested public input on the impact of hidden fees on consumer spending. After receiving over 12,000 comments, the FTC proposed a rule in October 2023 and opened the floor for additional feedback. A total of more than 72,000 comments were reviewed before the final rule was announced.
This extensive public participation highlights widespread dissatisfaction with deceptive pricing, and the rule is seen as a win for consumers who have long been frustrated by hidden charges. According to FTC estimates, the new rule could save consumers up to 53 million hours annually—time that would otherwise be spent hunting for the true cost of tickets or hotel stays. This translates to savings of over $11 billion in the next decade.
Industry Backlash and Political Debate
Despite broad support from consumers, some industry groups and political figures have criticized the rule. The U.S. Chamber of Commerce voiced concern, arguing that the rule interferes with businesses’ ability to set flexible pricing. The Chamber supports price transparency but believes the rule goes too far in dictating pricing strategies.
Further dissent came from Republican FTC member Andrew Ferguson, who is expected to take over the commission under a future Trump administration. While not opposing the substance of the rule, Ferguson objected to its timing, arguing that the rule-making process should have waited until a new administration took over.
Spotlight on Junk Fees
The issue of junk fees gained national attention in 2022 following the backlash over Taylor Swift’s Eras tour. Fans were outraged by hidden service fees added to concert tickets, primarily by companies like Live Nation and Ticketmaster. This public outcry prompted the FTC to act.
President Biden also expressed his commitment to combating junk fees, stating, “Wherever big corporations try to sneak fees onto bills, my administration has been fighting on behalf of American families to ban them.”
The FTC’s final rule does not ban junk fees outright or limit the types of fees businesses can charge. Instead, it requires that businesses be upfront about the full price, including all mandatory fees. This will foster a more competitive marketplace, enabling consumers to make informed decisions without the risk of hidden charges.
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