Airbnb
[Credit: Airbnb]

Airbnb fined up to A$30m for “misleading” pricing in Australia

Australia: Airbnb has issued an apology after being ordered to pay up to A$30 million in penalties and compensation for making “false or misleading” claims to around 70,000 customers who were given accommodation prices in US dollars between January 2018 and August 2021.

A federal court ruling ordered Airbnb to pay A$15 million in penalties and an additional A$15 million in compensation to affected customers. It is believed that some 63,000 consumers who made 77,000 bookings on Airbnb were affected by the miscommunication which displayed prices in the dollar sign without making it clear that it was a foreign currency, during the time specified.

According to court notes, 2,088 customers complained to Airbnb about being charged in US dollars rather than the Australian currency. Customers are expected to receive an average of A$230 in compensation as a result.

Airbnb has already refunded a further 8,000 users at a cost of A$9.4 million but the company is set to pay back A$7.4 million due to the total value in pricing difference between the Australian and US pricing structures.

The home-sharing platform previously admitted breaching Australian consumer law by misleading consumers, shortly after the Australian Competition and Consumer Commission [ACCC] in 2022.

On Wednesday [20 December], Justice Shaun McElwaine ruled that Airbnb had failed to clarify that the pricing was displayed in US dollars, apart from at the base of the first three pages when a user requests a booking and later on the fourth page when a user has their reservation confirmed.

The company attributed the problem to a “software bug”, although McElwaine said that Airbnb would have benefitted from apparently cheaper prices than its competitors because of the exchange rate between the US and Australian dollars.

As well as the fine and compensation, Airbnb was ordered to pay A$400,000 of the ACCC’s court costs. The commission chair, Gina Cass-Gottlieb, said that she hoped the compensation ruling would provide “a meaningful outcome for affected consumers”.

Susan Wheeldon, country manager for Australia and New Zealand at Airbnb, said: “Currencies that use a dollar symbol are typically accompanied with a three-letter currency code, except USD, which, before our update, appeared with the currency code only on the final booking page. While only a very small percentage of Australian guests are believed to have been impacted, we are disappointed that this happened. Airbnb would like to apologise to those guests.”

A week ago, Airbnb agreed to pay the Italian tax authorities €576 million [US$621 million] after a probe into alleged tax evasion at its European headquarters in Ireland. At the time, prosecutors alleged that the home-sharing firm had failed to collect a mandatory 21 per cent of landlords’ rental income [around €3.7 billion] and pay it to the Agenzia della Entrate, as per a 2017 law in the country.

The eventual sum was lower than it was previously required to pay after a judge in Milan ordered the seizure of €779.5 million [$831.6 million] from the Irish headquarters in November.

In addition, three unnamed people who served in managerial roles at Airbnb between 2017 and 2021, the period during which the violation is alleged to have place, were placed under investigation. That investigation remains ongoing.

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