5 Jul 2024A court decision in 2023 serves as a pointed warning to businesses they are open to massive fines if they fail to specify which currency is displayed in their online prices.
Airbnb Ireland receives massive fine for tricking customers on currency
In 2023 the Federal Court issued a $15 million fine against Airbnb Ireland for not making it clear that prices displayed on its website for accommodation in some Australian short-term rentals were in US dollars, not Australian dollars. (Please see Australian Competition and Consumer Commission v Airbnb Ireland UC [2023] FCA 1633.)
The ACCC took the global booking giant to the Federal Court, alleging Airbnb had tricked tens of thousands of customers into paying for their accommodation booking in US dollars, rather than Australian dollars. (Please see Airbnb to pay $15m in penalties and up to $15m compensation for misleading consumers, ACCC, 20 December 2023.)
This added around 50 per cent to the cost of the booking, due to the higher exchange rate of the US dollar. Airbnb attempted to assert that customers had agreed to be charged in US dollars, as the abbreviation “USD” was written in tiny font at the final stage of the booking process.
Not specifying currency was deceptive conduct
Justice Shaun McElwaine found Airbnb’s actions amounted to misleading and deceptive conduct. He ruled Airbnb Ireland must pay a $15 million fine for breaching Australian Consumer Law. (Airbnb Ireland runs the website for Australia and elsewhere. Airbnb Australia is a marketing entity and was not involved in the court case.)
Ireland-based Airbnb apologised and is compensating around 63,000 affected customers. The ACCC said this could cost another $15 million.
Because the company used just the dollar sign for the price on Airbnb’s Australian website, customers understandably thought it was in Australian dollars.
The court heard Airbnb received more than 2,000 complaints from customers who were surprised to discover they were being charged in US dollars, but Airbnb simply told them they had chosen to pay in US dollars themselves. It was there in the tiny font at the bottom.
Warning to companies not to mislead consumers
The case demonstrates that retailers, whether Australian or based overseas, must be careful not to mislead customers, or they risk hefty fines under Australian Consumer Law.
Businesses should heed the warning and seek legal advice if they start receiving complaints about their sales practices.
The Airbnb fine followed an $11 million fine by the Federal Court against US tech company Fitbit for misleading customers with deceptive sales claims about smartwatches and fitness trackers. (Please see Australian Competition and Consumer Commission v FitBit LLC [2023] FCA 1535.)
Fitbit, now owned by Google, admitted making false, misleading or deceptive statements to 58 customers about their guarantee rights to a refund or replacement after claims their device was faulty. (Please see Fitbit to pay $11m in penalties for misrepresentations about consumer guarantee rights, ACCC, 12 December 2023.)
Under consumer law all goods sold in Australia must be of acceptable quality and fit for purpose, and retailers must provide a repair, replacement or refund if this standard is not met.
