On December 17th, the Federal Trade Commission (“FTC”) announced its final rule intended to require the display of total price for tickets to live events and for short-term lodging.
The rule will require businesses that offer, display, or advertise a price for live-events tickets and short-term lodging to clearly and conspicuously disclose a total price inclusive of all mandatory fees (excluding shipping and government fees). And, before checkout, this total price must be displayed more prominently than other pricing information (such as itemized fees or surcharges).
The rule also prohibits businesses from misrepresenting any fee or charge associated with tickets and lodging—including the fee’s nature, purpose, amount, or refundability.
The final rule represents a significant narrowing of the FTC’s earlier proposal to promulgate a rule governing “hidden fees” throughout the U.S. economy. Ultimately, the FTC explains, it decided to “first focus its rulemaking authority on combatting [hidden fee] practices in the live-event ticketing and short-term lodging industries, the two industries in which the Commission first began evaluating [those practices] more than a decade ago.”
The FTC’s rule, which may take effect as soon as late April 2025 (120 days from publication in the federal register), is intended to prohibit two different “hidden fee” practices. The first is drip pricing, where a business quotes an initial lower price while gradually disclosing or “dripping” mandatory fees during the buying process (such as a “service fee” added to the price of tickets). The second is partitioned pricing, which the FTC describes as dividing a price into multiple components without ever disclosing the total amount.
The FTC also warned “other industries” that it plans to enforce against the same pricing practices through case-by-case adjudication using Section 5 of the FTC Act—and added that perhaps, one day, it will promulgate another rule that applies “economy wide.”
The FTC says its rule will apply to consumer transactions involving covered goods and services as well as “business-to-business (‘B2B’) transactions.” That means a business that sells hotel rooms or vacation rentals through other businesses—as many travel service providers do—are themselves subject to the rule and must provide intermediaries with accurate up-front total pricing information. The FTC says the rule’s “application to B2B transactions” is intended to reduce the risk that an intermediary will itself (inadvertently) violate the rule if a supplier provides it with inaccurate pricing information.
The Commission approved the rule with a 4-1 vote. Commissioner Andrew Ferguson, who is President-elect Trump’s nominee to serve as the next chair of the FTC, dissented on timing grounds, explaining that in his view the FTC should not adopt major new rules until after the Trump Administration is in place. Commissioner Ferguson explained that his dissent “should not be understood to state my position on the Final Rule’s merits, or on whether the Commission under President Trump should enforce the Final Rule.”
Businesses displaying prices in California should also check out our earlier post on California’s distinct “hidden fees” law, SB 478.