Thursday, 19 July 2018

EU Commission cracks down on Airbnb to comply with EU consumer protection

On 16th July, the EU Commission published a press release calling on Airbnb to comply with EU consumer law, especially with regard to price transparency.

Airbnb's innovative sharing economy model has been very successful and has won a large part of the short term rental market; yet, that has not been without its share of controversy.

The press release focuses on the following issues:

1) Price transparency

The EU Commission points out that current Airbnb practices contravene the Unfair Commercial Practices Directive. More specifically, Airbnb should clarify on its platform whether the renter is a private person or a professional. As more and more traditional businesses, such as hotels, apartments and bed and breakfasts, are listed on Airbnb, consumers must be aware in a clear manner as to whether they are renting from a professional. If they do rent from a professional, the increased protection of EU consumer law applies.

Furthermore, Airbnb should present the total price for a rental on the initial search of the consumer, as at the moment, obligatory charges such as cleaning and service are added on in later steps, thus making it more difficult for consumers to compare offers.

2) Clarification or removal of unfair contract terms 

The terms and conditions of Airbnb should be amended in order not to create a significant imbalance between the parties. Also, the terms should be more transparent, presented in a clear and intelligible language in order to allow consumers to be better informed. However, even if the terms are presented in a more transparent manner, as they should, it does not ensure that consumers will be more likely to actually read them.

Some of the problematic terms highlighted in the press release include:
  • that the company should not mislead consumers by going to a court in a country different from the one in their Member State of residence;
  • Airbnb cannot decide unilaterally and without justification which terms may remain in effect in case of termination of a contract;
  • Airbnb cannot deprive consumers from their basic legal rights to sue a host in case of personal harm or other damages;
  • Airbnb cannot unilaterally change the terms and conditions without clearly informing consumers in advance and without giving them the possibility to cancel the contract.
Finally, in terms of redress, Airbnb should comply with art. 14(1) of  Regulation 524/2013 (the ODR Regulation) to display the link to the ODR platform. However, traders are not obliged to participate in the ODR platform scheme.

Now the ball is in the court of Airbnb, who has a deadline until the end of August to submit solutions to the Commission on how they intend to comply with EU consumer law. These suggestions will be discussed in a meeting between the Commission and the national authorities in September, and should they be found to be unsatisfactory, national authorities will use their enforcement powers.

It will be interesting to see how this story develops and whether this is the start of a new more consumer-friendly sharing economy.

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