The Federal Trade Commission (FTC) has introduced a new regulation, effective May 12, 2025, aimed at eliminating hidden fees in the pricing of live event tickets and short-term lodging. This initiative seeks to enhance transparency and protect consumers from unexpected charges that often appear during the final stages of a transaction.
Scope of the New Rule
The regulation targets businesses involved in selling tickets for live events—such as concerts, sports games, and theater performances—as well as providers of short-term accommodations, including hotels, motels, and platforms like Airbnb and VRBO. Third-party platforms, resellers, and travel agents are also subject to this rule.
Key Provisions
Under the new rule, businesses are required to:
– Disclose Total Price Upfront: All known charges and fees must be included in the advertised price. This total price should be prominently displayed in advertisements and offers, ensuring it is more noticeable than any other pricing information.
– Avoid Misleading Practices: The use of vague terms like convenience fees, service fees, or processing fees is discouraged. Businesses must provide clear and truthful information about all fees, including refund policies.
– Prohibit Bait-and-Switch Tactics: Any practices that conceal or misrepresent total prices and fees are banned.
Exclusions and Additional Requirements
Certain charges, such as taxes or government fees, shipping charges, and fees for optional goods or services, can be excluded from the total price. However, businesses must disclose these exclusions before requesting payment. For instance, if shipping charges are not included in the advertised price, the business is obligated to clearly state the amount and purpose of these charges.
Background and Industry Response
The FTC initially passed this rule in December 2024, marking a significant victory for consumers who have long been frustrated by hidden fees. The regulation aligns with broader governmental efforts to address deceptive pricing practices across various sectors.
Industry leaders have expressed support for the new rule. Ticketmaster, a major player in the ticketing industry, has advocated for all-in pricing as a nationwide standard and welcomed the FTC’s mandate for greater transparency.
Implementation and Enforcement
The rule is set to take effect on May 12, 2025. The FTC has provided a comprehensive FAQ to guide businesses in complying with the new requirements. The agency estimates that this regulation will save U.S. consumers approximately 53 million hours annually that would otherwise be spent deciphering total costs before making purchases.
Conclusion
The FTC’s new rule represents a significant step toward transparent pricing in the live event and short-term rental industries. By mandating upfront disclosure of all fees, the regulation aims to eliminate the frustration and financial strain caused by hidden charges, fostering a more honest and consumer-friendly marketplace.
