Accommodation provider platform Airbnb has been fined $15 million (US$10.2 million) by Australia’s Federal Court for misleading customers after advertising Australian-based listings to users in U.S. dollars as opposed to Australian dollars.
Legal action was taken against Airbnb Ireland UC by the Australian Competition and Consumer Commission (ACCC). Airbnb Australia Pty Ltd operates as a marketing entity of the Ireland-based platform and is independent of the enforcement action taken by Australia’s consumer watchdog.
Some property listings were advertised to domestic users in USD for a period between January 2018 and August 2021, leading 70,000 customers to unknowingly book stays at an inflated price.
After receiving over 2,000 complaints, the issue was rectified by Airbnb on Aug. 31, 2021, and a USD abbreviation was added to distinguish the currencies.
Airbnb argued in court that site users had been responsible for displaying prices in USD, but that was found to be incorrect in some cases. They acknowledged the displayed dollar sign did not adequately indicate in which currency listings were being charged to consumers.
Proceedings were initiated by the ACCC in June of 2022, and ACCC Chair Gina Cass-Gottlieb said consumers had been “misled” by Airbnb after “reasonably assuming the price referred to Australian dollars given they were on Airbnb’s Australian website, searching for accommodation in Australia and seeing a dollar sign.”
In court, Airbnb admitted to making false or misleading representations.
“By paying in US dollars, these consumers were charged more than they expected to pay, and were deprived of a chance to make an informed decision about whether to make the booking because of this misleading conduct regarding the price. We took this case to send a strong signal to large digital platforms like Airbnb that they must comply with the Australian Consumer Law and not mislead consumers,” Ms Cass-Gottlieb said in a statement to media.
In terms of redress, Airbnb agreed to offer up to $15 million in compensation to approximately 63,000 affected customers. Those eligible will shortly be contacted directly by Airbnb to lodge compensation claims.
They will also be responsible for a significant portion of the ACCC’s costs in bringing the action.
“We are pleased with the undertaking by Airbnb to pay compensation, which provides a meaningful outcome for the affected consumers, “ Ms. Cass-Gottlieb said.
The average dollar amount of compensation for affected customers is estimated to be around A$230
Any compensation will be made up of the shortfall between what consumers in Australia paid erroneously in US dollars and what they expected to pay under the exchange rate at the time. Airbnb also agreed to reimburse foreign currency transaction fees.
“Affected consumers ultimately paid significantly more than they expected to pay because of the prevailing USD/AUD exchange rate at the time. Some users also paid additional charges to their banks as a result of paying in a foreign currency,” Ms Cass-Gottlieb said.
The settlement comes on the heels of a 576 million euro (US$621 million) amount Airbnb agreed to pay to settle a long-standing dispute with Italian tax authorities over short-term rental taxes, earned by hosts, that were retained by the company.
