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Australia accuses Airbnb of misleading customers on price

Published 06/07/2022, 09:32 PM
Updated 06/08/2022, 04:47 AM
© Reuters. Airbnb app is seen on a smartphone in this illustration taken, February 27, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) -Australia's antitrust regulator has filed a lawsuit against Airbnb Inc, accusing the accommodation-sharing website of misleading users into paying more than advertised for their stays, widening its scrutiny of global technology platforms.

From 2018 to 2021, the San Francisco-based internet giant advertised and charged room rates in U.S. dollars without indicating the much higher figures in Australian dollars, the Australian Competition and Consumer Commission (ACCC) said in a court filing on Wednesday https://www.accc.gov.au/media-release/airbnb-allegedly-misled-australians-about-accommodation-prices.

Airbnb refused to refund users who complained about being misled, saying they had chosen to view rates in the USD even though users said they had not, the ACCC said in the filing, adding, the firm also refused to refund currency conversion fees, claiming they were banks' responsibility.

The Australian dollar bought an average of 72 U.S. cents during the time covered by the lawsuit, meaning a customer renting accommodation advertised at $500 would actually pay around A$700 plus foreign exchange fees, the regulator said.

"While a fraction of a percentage of guests are believed to have been impacted ... we will compensate affected guests," Susan Wheeldon, Airbnb's country manager - Australia and New Zealand, said in an emailed statement, but declined to offer further details.

Wheeldon said Airbnb has since updated its platform, so relevant currencies are "clearly displayed" from the first page for Australian guests.

In the lawsuit, the ACCC said Airbnb stood to benefit unfairly over competitors because the "false and misleadingly low prices conveyed ... made the accommodation available on the platform appear to be more attractive."

The regulator told Reuters in an emailed response while the court would determine any amount of penalty, the maximum fine per breach would be the number greater of A$10 million ($7.20 million), thrice the value of the benefit obtained, or 10% of the annual turnover made over the last year.

"However, we note this is only the maximum penalty per breach, and the ACCC may seek a higher amount if there are multiple breaches," it added.

The lawsuit puts Airbnb in the company of several high-profile targets of a regulator bent on reining in the power of big technology firms, including Meta Platforms Inc's Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) Inc's Google regarding content licensing fees https://www.reuters.com/article/us-australia-media-regulator-idUSKCN24V3UP.

© Reuters. Airbnb app is seen on a smartphone in this illustration taken, February 27, 2022. REUTERS/Dado Ruvic/Illustration

It is currently conducting a review of Amazon.com Inc (NASDAQ:AMZN) and other online retailers that may recommend changes to the sector.

($1 = 1.3885 Australian dollars)

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