Companies pledge to Biden they’ll eliminate ‘junk fees’

Companies pledge to Biden they'll eliminate 'junk fees'

President Joe Biden is assembling leaders from several ticketing and travel companies who are pledging to end the practice of hidden or “junk” fees.

The meeting comes about four months after President Biden called out the practice of adding hidden fees just before completing a transaction online. 

According to the White House, representatives from Live Nation, SeatGeek, xBk, Airbnb, the Pablo Center at the Confluence, TickPick, DICE and the Newport Festivals Foundation will be on hand. 

At today’s meeting, Live Nation will announce a commitment to roll out “upfront all-in pricing” for tickets to shows at its venues and festivals starting in September. Live Nation’s parent company Ticketmaster will add the feature for all other tickets it sells. 

SeatGeek, which acts as both a direct and resale ticket seller, said it will make it easier for customers to shop on the basis of an all-in price.

“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,” the White House said on Thursday. “It is also just a first step towards addressing junk fees in the economy. The president continues to call on Congress to pass legislation that mandates up-front all-in pricing for all ticket sellers, bans surprise ‘resort fees,’ eliminates early termination fees charged by cable, internet, and cellphone companies, and bans family seating fees.”

The White House pointed to  that found that these pricing practices lead customers to pay more than they otherwise would.

“Previous studies, mostly focusing on just the buyer side of the market, have found this to be harmful, causing buyer confusion and discouraging price search,” the researchers said. 

“We find that the practice of drip pricing has a negative effect on buyers even if they are well informed about the use of drip pricing and the maximum drip a seller may charge. Total prices are lower and buyer surplus higher if sellers are required to charge a transparent price,” they added. “Also in cases in which buyers are less well informed about the extent of drip prices, we find anticompetitive effects of drip pricing. In this case, drip pricing may be more detrimental to consumers, as the number of mistakes increases and consumers fail to identify the cheapest seller more often.”

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