Biden Announces Voluntary Commitments by Companies on "Junk Fees"

Last November, President Biden said that his Administration planned to take on so-called "junk fees."  Accompanied by CFPB Director Rohit Chopra and FTC Chair Lina Khan, the President said that he was concerned about fees that are are designed to "confuse or deceive consumers or to take advantage of lock-in or other forms of situational market power." 

At the time, the Administration identified four categories of fees that it considers to be "junk fees": 

• Mandatory fees that often hide the full price -- Where a seller publishes a low price and then adds mandatory fees later on, at the back-end of the buying process or when a consumer tries to terminate the service.  One example the Administration cited was "service fees" charged by ticket sellers. 
• Surprise fees that consumers learn about after purchase -- Where a seller charges surprise feels that consumers do not expect, even charges that may not be mandatory, such as "family seating fees" charged by some airlines. 
• Exploitive or predatory fees -- Where a seller charges excessive fees -- such as termination fees and bank overdraft fees -- that target consumers who have limited alternative options, because they are locked into a product or service or are otherwise economically vulnerable.  
• Fraudulent fees -- Where a seller makes false or fraudulent representations about pricing, such as when a bank offers a "no fee" bank account, but then actually charges significant fees.  

This week, the President announced that several companies, including Live Nation, have voluntarily agreed to provide all-in pricing.  In a statement, the White House said that, "Today’s voluntary actions demonstrate that companies both big and small recognize the importance of providing consumers with honest, up-front all-in pricing, rather than tricking them with surprise fees at the end of checkout."

For example, the White House explained that "Live Nation is committing to roll out an upfront all-in pricing experience in September showing just one clear, total price for more than 30 million fans who attend shows at the more than 200 Live Nation-owned venues and festivals across the country." 

The announcement by the White House emphasizes the importance that the Administration is placing on this issue and should serve as a warning to brands to consider their pricing practices.  This is certainly not the last we're going to hear from the Administration on this issue.  For example, the FTC is currently considering a rulemaking on "junk fees" as well, which not only could change the pricing landscape, but is certainly a signal that additional enforcement is coming as well. 

As the President said in his remarks, "the solution is what is called 'all-in pricing.'  And that’s where companies fully disclose their fees upfront when you start shopping so you’re not surprised at the end when you check out."