Company Parent of Booking.com Agrees to $9.5 Million Settlement over "Junk Fee" Allegations in Texas
In a recent development, Booking Holdings, the parent company of Booking.com, has agreed to pay $9.5 million to settle a lawsuit filed by Texas Attorney General Ken Paxton. This settlement is not connected to the FTC's lawsuit against a ticket reseller for evading Taylor Swift's Eras Tour ticket limits.
The lawsuit accused Booking.com of 'drip pricing,' a practice of improperly bundling fees in a taxes and fees line item at checkout. Texas Attorney General Ken Paxton alleged that this practice was deceptive and misleading to consumers.
The settlement marks the largest by a U.S. state related to junk fee practices against any hotel or online travel agency. The agreement requires Booking to disclose fees upfront, aligning with recent Federal Trade Commission (FTC) efforts to bring greater consistency to price displays.
The FTC's Junk Fees Rule, announced in December 2022 by Lina Khan, the head of the FTC at the time, requires hotels, ticket sellers, and vacation rental operators to disclose total prices up front. This rule was part of former U.S. President Joe Biden's administration's goal of cracking down on fees that boost consumer costs without visible benefits.
Booking Holdings, which also operates Priceline.com and Kayak, stated that it is committed to transparency and providing accurate information. The company reiterated its alignment with the FTC's efforts, emphasising its dedication to upholding consumer protection regulations.
In a similar move, Paxton reached settlements in 2023 with the Choice, Hilton, and Marriott hotel chains over similar junk fee practices. The current FTC Chairman, Andrew Ferguson, dissented, stating that the incoming Trump administration should decide which rules to adopt.
No immediate copy of the settlement agreement was available at the time of writing. However, Booking Holdings has maintained its stance on transparency and provided assurances that it will continue to work towards improving its practices in line with regulatory requirements.
