Consumer watchdog sues Airbnb after thousands complain

Barbara Francis & Rus Littleson

The federal government’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), has instituted proceedings in the Federal Court against Airbnb for allegedly misleading consumers.

In court documents, the ACCC alleges that from 2018 to 2021, Airbnb made false or misleading representations to thousands of Australian consumers by displaying prices on its website or mobile app for Australian accommodation using only a dollar sign ($), without making it clear that those prices were in US dollars.

The ACCC website alleges that the behaviour went further: “When thousands of consumers complained to Airbnb about being charged more than the displayed price, the ACCC alleges that Airbnb engaged in further misleading or deceptive conduct by telling many of them that it had displayed prices in US dollars because the user had selected this currency, when this was often not the case.”

“We allege that Airbnb’s misleading conduct meant that consumers were deprived of the opportunity to make an informed choice about whether, and at what price, to book their holiday accommodation on the Airbnb platform,” ACCC chair Gina Cass-Gottlieb said.

“Despite thousands of consumers complaining to Airbnb about the way prices were displayed, Airbnb didn’t amend its booking platform until after the ACCC raised the issue.”

The watchdog is suing US-based Airbnb Inc. and Airbnb Ireland UC, seeking declarations, injunctions, pecuniary penalties, orders for the compensation for affected consumers.

The ACCC legal suit follows another year of bad press for Airbnb.

Last year Airbnb was forced to suspend a Victorian host for banning guests who had received the COVID vaccine and for falsely claiming vaccinated people were infectious. The host refused to accept bookings from guests who had been vaccinated with “experimental C-19 gene therapy vaccines”.

In the Moorabbin Magistrates’ Court last month, the owner of an Airbnb property in Hepburn pleaded guilty to a charge of harassing a guest with a message saying she would “burn in hell”. The host was angered by the guest who left a review on a travel website saying his Airbnb rental was “just OK”.

Four years of the “damp squib”

In 2018 the Victorian Government passed the weakest regulatory restrictions for short-term letting ever seen in Australia, to the delight of Airbnb.

After the tragic stabbing death of a young woman at a party in a short-stay apartment in the Melbourne CBD at EQ Tower in July 2018, Premier Andrews stated that his government would look into tightening regulations for short-stay apartments.

Despite this promise, in August 2018 the government passed the same legislation word for word that had been rejected by the Upper House as inadequate more than 12 months earlier.

The government stated in its policy response that it would conduct a review in 2021 to see whether the new regulations were working and would seek feedback from stakeholders and resident groups at that time. However, this review was not inserted into the Bill and the Labor Government has not conducted the review.

The former Shadow Minister for Planning David Davis once addressed Parliament to slam the government for reintroducing the same legislation which he labelled “weak”, “pathetic” and a “damp squib.” The Liberal Party told Parliament that it would seek to have this legislation amended if it were to form government at the next election. Ultimately however, the Liberal Party did not block the passing of the Bill when it came time to vote on the legislation and was absent from the chamber when it was put to the vote.

The outcome ranked as one of the worst cases of politicking and back-room deals seen in Parliament.

Tom Bacon, CEO of Strata Title Lawyers said at the time, “The legislation is not worth the paper it is written on. These regulations are the lightest feather of a touch, and do not provide owners’ corporations with any meaningful way of regulating the issues associated with short-term stays. I would not advise owners’ corporations to use these regulations; it would be a costly exercise and a waste of time.”

What do we want?

We Live Here calls on the Andrews government to announce a policy overhaul before the November state election:

1. AMEND the Owners’ Corporation Act 2006 to regulate the short-stay industry – far beyond the scope of the woefully inadequate pro-Airbnb “party” bill that was shamefully passed just before the election. The Airbnb “party” bill made it even harder for owners’ corporations to recoup costs of damage and it completely ignored issues of security, amenity and community development – these issues must be addressed.

2. INTRODUCE a registration system to manage the burgeoning short-stay industry.

3. RESTORE POWERS to owners’ corporations to make decisions about use of a lot, lost in Justice Riordan’s Supreme Court decision in July 2017.

4. ENGAGE with We Live Here. Talk to us – we represent more than 350 buildings in Melbourne, Victoria, Australia and globally. More than 80 per cent of Melbourne’s resident population lives in strata buildings. We can help you understand how to look after strata communities.

Mr Andrews, you must be aware that governments around the nation and around the world are grappling with the issue of short-stays and the lack of affordable housing; and the various means of regulation being adopted by NSW, Tasmania, Western Australia, South Australia, Canberra, New York, Paris, London, Amsterdam, Berlin, etc.

Local councils in Victoria, tired of waiting for meaningful action from the state government are starting to implement their own versions of the most basic regulations to protect the community: Councils in the Yarra Valley, Frankston, and the Mornington Peninsula have each developed regulations around issues such as registration, day limits and accountability.

COVID provided a brief respite from short-stays due to the significant drop in visitors. Disturbingly many commercial operators with swags of apartments, not just Airbnb, are now beginning to flood the market. Forget about the industry spin that it’s just “Mums and Dads wanting to a rent out a room in their own home” – we are witnessing a large-scale commercialisation of the residential market.

Right now, the government has an amazing opportunity to put Melbourne on the map by proactively implementing regulation before the whole short-stay issue gets totally out of hand once again.

You have seen what happens to a leader who does not listen to the electorate.

Please, Mr Andrews listen to your community. Talk to us. Hear us. Stand up for us.

Campaign donations

As a not-for-profit organisation, donations from individuals and buildings keep our campaigns going. To register as a supporter of We Live Here or to donate, please visit welivehere.net. We Live Here does not accept donations from commercial tourism interests. •

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