Trade Regulation Rule on Unfair or Deceptive Fees

<RULE> FEDERAL TRADE COMMISSION <CFR>16 CFR Part 464</CFR> <RIN>RIN 3084-AB77</RIN> <SUBJECT>Trade Regulation Rule on Unfair or Deceptive Fees</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Trade Commission. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Federal Trade Commission (“FTC” or “Commission”) is issuing a final trade regulation rule entitled “Rule on Unfair or Deceptive Fees” (“rule” or “final rule”) and Statement of Basis and Purpose addressing certain unfair or deceptive practices involving fees or charges for live-event tickets and short-term lodging: bait-and-switch pricing that hides the total price by omitting mandatory fees and charges from advertised prices; and misrepresenting the nature, purpose, amount, and refundability of fees or charges. The final rule specifies that it is an unfair and deceptive practice for businesses to offer, display, or advertise any price of live-event tickets or short-term lodging without clearly, conspicuously and prominently disclosing the total price. The rule also requires businesses to clearly and conspicuously make certain disclosures before a consumer consents to pay. The rule further specifies that it is an unfair and deceptive practice for businesses to misrepresent any fee or charge in any offer, display, or advertisement for live-event tickets or short-term lodging. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective May 12, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Copies of this document are available on the Commission's website, <E T="03">www.ftc.gov</E> . <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Janice Kopec or Annette Soberats, Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission, 202-326-2550 (Kopec), 202-326-2921 (Soberats), <E T="03">jkopec@ftc.gov, asoberats@ftc.gov</E> . </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Statement of Basis and Purpose</HD> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Background</FP> <FP SOURCE="FP1-2">A. Advance Notice of Proposed Rulemaking</FP> <FP SOURCE="FP1-2">B. Notice of Proposed Rulemaking</FP> <FP SOURCE="FP1-2">C. Informal Public Hearing</FP> <FP SOURCE="FP-2">II. The Legal Standard for Promulgating the Rule</FP> <FP SOURCE="FP1-2">A. Prevalence of Acts or Practices Addressed by the Rule</FP> <FP SOURCE="FP1-2">B. Manner and Context in Which the Acts or Practices Are Deceptive or Unfair</FP> <FP SOURCE="FP1-2">C. The Economic Effect of the Rule</FP> <FP SOURCE="FP-2">III. Section-by-Section Analysis</FP> <FP SOURCE="FP1-2">A. § 464.1: Definitions</FP> <FP SOURCE="FP1-2">1. Ancillary Good or Service</FP> <FP SOURCE="FP1-2">2. Business</FP> <FP SOURCE="FP1-2">3. Clear(ly) and Conspicuous(ly)</FP> <FP SOURCE="FP1-2">4. Covered Good or Service</FP> <FP SOURCE="FP1-2">5. Government Charges</FP> <FP SOURCE="FP1-2">6. Pricing Information</FP> <FP SOURCE="FP1-2">7. Shipping Charges</FP> <FP SOURCE="FP1-2">8. Total Price</FP> <FP SOURCE="FP1-2">(a) Mandatory Fees</FP> <FP SOURCE="FP1-2">(b) Maximum Total</FP> <FP SOURCE="FP1-2">(c) Itemization</FP> <FP SOURCE="FP1-2">(d) Exclusions From Total Price</FP> <FP SOURCE="FP1-2">(e) Intersection With IRS Requirements</FP> <FP SOURCE="FP1-2">B. § 464.2 Hidden Fees Prohibited</FP> <FP SOURCE="FP1-2">1. § 464.2(a)</FP> <FP SOURCE="FP1-2">(a) Contingent Fees</FP> <FP SOURCE="FP1-2">(b) Ticket Service Fees</FP> <FP SOURCE="FP1-2">(c) Credit Card and Other Payment Processing Surcharges</FP> <FP SOURCE="FP1-2">(d) Dynamic Pricing and National Advertising</FP> <FP SOURCE="FP1-2">(e) Rebates, Bundled Pricing, and Other Discounts: Compliance When Promotional Pricing Models Have Different Fees</FP> <FP SOURCE="FP1-2">(f) Online Marketplaces</FP> <FP SOURCE="FP1-2">2. § 464.2(b)</FP> <FP SOURCE="FP1-2">3. § 464.2(c)</FP> <FP SOURCE="FP1-2">C. § 464.3 Misleading Fees Prohibited</FP> <FP SOURCE="FP1-2">D. § 464.4 Relation to State Laws</FP> <FP SOURCE="FP1-2">E. § 464.5 Severability</FP> <FP SOURCE="FP-2">IV. Challenges to the FTC's Legal Authority To Promulgate the Rule</FP> <FP SOURCE="FP1-2">A. Major Questions Doctrine</FP> <FP SOURCE="FP1-2">1. The Rule Does Not Address a Major Question</FP> <FP SOURCE="FP1-2">(a) The Commission Has a Long History of Addressing Unfair or Deceptive Acts or Practices Related to Pricing Information</FP> <FP SOURCE="FP1-2">(b) Commenters' Claims About the Scope of the Acts or Practices Covered by the Rule Are Inapplicable or Overstated</FP> <FP SOURCE="FP1-2">2. Congress Provided the Commission With a Clear Grant of Authority To Promulgate This Rule</FP> <FP SOURCE="FP1-2">B. Non-Delegation Doctrine</FP> <FP SOURCE="FP1-2">C. First Amendment</FP> <FP SOURCE="FP1-2">1. Comments</FP> <FP SOURCE="FP1-2">2. Legal Standard</FP> <FP SOURCE="FP1-2">3. The Rule's Disclosure Requirements Are Constitutional Under Zauderer</FP> <FP SOURCE="FP1-2">4. The Rule Does Not Prohibit Truthful Speech</FP> <FP SOURCE="FP1-2">5. The Rule's Treatment of Credit Card Fees and Government Charges Does Not Violate the First Amendment</FP> <FP SOURCE="FP1-2">D. Commission Structure</FP> <FP SOURCE="FP1-2">E. Administrative Procedure Act</FP> <FP SOURCE="FP-2">V. Final Regulatory Analysis Under Section 22 of the FTC Act</FP> <FP SOURCE="FP1-2">A. Concise Statement of the Need for, and Objectives of, the Final Rule</FP> <FP SOURCE="FP1-2">B. Alternatives to the Final Rule the Commission Considered, Reasons for the Commission's Determination That the Final Rule Will Attain Its Objectives in a Manner Consistent With Applicable Law, and the Reasons the Particular Alternative Was Chosen</FP> <FP SOURCE="FP1-2">C. The NPRM's Preliminary Regulatory Analysis</FP> <FP SOURCE="FP1-2">D. Significant Issues Raised by Comments, the Commission's Assessment and Response, and Any Changes Made as a Result</FP> <FP SOURCE="FP1-2">1. Comments on Costs</FP> <FP SOURCE="FP1-2">(a) Public Comments: Estimated Costs Are Too Low</FP> <FP SOURCE="FP1-2">(b) Public Comments: Unquantified Costs to Firms</FP> <FP SOURCE="FP1-2">(c) Public Comments: Unquantified Costs to Consumers</FP> <FP SOURCE="FP1-2">(d) Public Comments: Unquantified Costs to Third Parties</FP> <FP SOURCE="FP1-2">(e) Public Comments: Costs From Incorporating Contingent Fees Into Total Price</FP> <FP SOURCE="FP1-2">2. Comments on Benefits</FP> <FP SOURCE="FP1-2">(a) Public Comments: Benefits Are Too High</FP> <FP SOURCE="FP1-2">(b) Public Comments: Unquantified Benefits</FP> <FP SOURCE="FP1-2">3. Comments on the Economy-Wide Break-Even Analysis</FP> <FP SOURCE="FP1-2">(a) Public Comments: Break-Even Analysis Has Incorrect Assumptions or Contains Errors</FP> <FP SOURCE="FP1-2">(b) Public Comments: Break-Even Analysis Is Not Enough To Justify an Economy-Wide Rule</FP> <FP SOURCE="FP1-2">(c) Public Comments: Break-Even Analysis Is Satisfactory</FP> <FP SOURCE="FP1-2">E. Economic Regulatory Analysis of the Final Rule's Costs and Benefits</FP> <FP SOURCE="FP1-2">1. Economic Rationale for the Final Rule</FP> <FP SOURCE="FP1-2">(a) Shrouded Pricing as a Cause of Market Failure</FP> <FP SOURCE="FP1-2">(b) Shrouded Pricing as a Source of Biased Expectations</FP> <FP SOURCE="FP1-2">2. Economic Effects of the Final Rule</FP> <FP SOURCE="FP1-2">(a) General Benefits of the Final Rule</FP> <FP SOURCE="FP1-2">i. Reductions in Search Costs</FP> <FP SOURCE="FP1-2">ii. Reductions in Deadweight Loss</FP> <FP SOURCE="FP1-2">(b) Welfare Transfers</FP> <FP SOURCE="FP1-2">(c) General Costs of the Final Rule</FP> <FP SOURCE="FP1-2">3. Quantified Welfare Effects</FP> <FP SOURCE="FP1-2">(a) Quantified Compliance Costs</FP> <FP SOURCE="FP1-2">(b) Break-Even Analysis</FP> <FP SOURCE="FP1-2">i. Sensitivity Analysis: Assume Higher Wage Rates</FP> <FP SOURCE="FP1-2">(c) Quantified Benefits and Costs: Live-Event Ticketing Industry</FP> <FP SOURCE="FP1-2">i. Live-Event Ticketing: Estimated Benefits of the Final Rule</FP> <FP SOURCE="FP1-2">(a) Consumer Time Savings When Shopping for Live-Event Tickets</FP> <FP SOURCE="FP1-2">(b) Additional Unquantified Benefits: Reductions in Deadweight Loss and Abandoned Transactions</FP> <FP SOURCE="FP1-2">ii. Live-Event Ticketing: Estimated Costs of the Final Rule</FP> <FP SOURCE="FP1-2">iii. Live-Event Ticketing: Net Benefits</FP> <FP SOURCE="FP1-2">iv. Live-Event Ticketing: Uncertainties</FP> <FP SOURCE="FP1-2">(d) Quantified Benefits and Costs: Short-Term Lodging Industry</FP> <FP SOURCE="FP1-2">i. Short-Term Lodging: Estimated Benefits of the Final Rule</FP> <FP SOURCE="FP1-2">(a) Search Statistics</FP> <FP SOURCE="FP1-2">(b) U.S. Hotels and Home Shares</FP> <FP SOURCE="FP1-2">(c) Foreign Hotels and Home Shares With U.S.-Facing websites</FP> <FP SOURCE="FP1-2">(d) All Hotels and Home Shares</FP> <FP SOURCE="FP1-2">(e) Additional Unquantified Benefits: Reductions In Deadweight Loss and Abandoned Transactions</FP> <FP SOURCE="FP1-2">ii. Short-Term Lodging: Estimated Costs of the Final Rule</FP> <FP SOURCE="FP1-2">(a) Panel A: U.S. Hotels and Home Share Hosts</FP> <FP SOURCE="FP1-2"> (b) Panel B: Foreign Hotels and Home Share Hosts </FP> <FP SOURCE="FP1-2">(c) Panel C: All Hotels and Home Share Hosts (US + Foreign)</FP> <FP SOURCE="FP1-2">iii. Short-Term Lodging: Net Benefits</FP> <FP SOURCE="FP1-2">iv. Short-Term Lodging: Uncertainties</FP> <FP SOURCE="FP1-2">4. Economic Evaluation of Alternatives</FP> <FP SOURCE="FP1-2">5. Summary of Results</FP> <FP SOURCE="FP1-2">6. Appendix A: Model of Market Distortion Caused by Drip Pricing</FP> <FP SOURCE="FP1-2">7. Appendix B: Short-Term Lodging Industry Minutes per Listing Calculations</FP> <FP SOURCE="FP1-2">(a) Low-End Estimate of Minutes per Listing Calculation</FP> <FP SOURCE="FP1-2">(b) High-End Estimate of Minutes per Listi ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 743k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━