The federal court imposes a $15 million fine and mandates up to $15 million in compensation for deceptive claims to approximately 70,000 customers
Australians who booked with Airbnb and were charged in US dollars may qualify for compensation following a federal court’s A$15 million fine against the company for not transparently indicating that certain bookings were not in Australian dollars.
Additionally, Airbnb is directed to disburse up to $15 million in compensation to impacted customers, covering refunds and conversion fees. The anticipated average compensation for customers is around A$230.
Between January 2018 and August 2021, Airbnb was found to have provided false or deceptive information to about 70,000 customers by presenting pricing in US dollars without clearly specifying that it was not in Australian dollars. The website utilized the “$” sign for pricing without making the currency distinction evident.
Airbnb acknowledged violating Australian consumer law in this practice at the outset of the case initiated by the Australian Competition and Consumer Commission (ACCC) last year.
In a federal court decision on Wednesday, Justice Shaun McElwaine stated that the company failed to adequately disclose that the pricing was in US dollars, except for a less conspicuous mention at the bottom of the initial three webpages of the booking, becoming more prominent only on the fourth page when a user confirmed the booking.
The court highlighted that 2,088 customers filed complaints with Airbnb regarding being billed in US dollars, with the false assurance that the currency aligns with their selection.
The company later attributed this issue to a software glitch that neglected to default Australian customers to the local currency. The court determined that the Airbnb board was cognizant of customer complaints dating back to 2018.
During the covered period, approximately 77,000 reservations were made by 63,000 users. While Airbnb has already refunded the complete accommodation cost to an additional 8,000 users, totaling A$9.4 million, the court found the overall disparity between Australian and US pricing for the relevant bookings amounted to $16.8 million. Airbnb would have garnered about A$9 million in revenue from this difference.
McElwaine suggested that Airbnb probably gained an advantage as customers assumed the pricing was in Australian dollars, making accommodations appear more cost-effective compared to rivals due to the exchange rate.
As per the agreed-upon orders between the ACCC and Airbnb, the company is obligated to pay a $15 million fine and cover A$400,000 in court costs incurred by the commission.
Gina Cass-Gottlieb, the ACCC chair, stated that the choice to offer compensation would deliver “a significant resolution for the impacted consumers.”
Airbnb will reach out to eligible consumers within the next 45 days, extending an invitation to file a claim. Those who believe they are eligible for compensation and haven’t been contacted by that date can also reach out to Airbnb to inquire about their claim,” she added.
Susan Wheeldon, Airbnb’s country manager for Australia and New Zealand, affirmed that the company promptly addressed the issue once it was brought to its attention.
Currencies featuring a dollar symbol usually come with a three-letter currency code, except USD, which, prior to our update, was only displayed with the currency code on the final booking page,” she explained.
Although it is estimated that only a minimal percentage of Australian guests were affected, we regret this occurrence. Airbnb would like to extend our apologies to those guests.
