Airbnb is in trouble with Brussels as its advertised charges often fail to comply with EU transparency laws.
European Commissioner, Vera Jourová, has given the Silicon Valley behemoth an end-of-August deadline to get into shape, or face sanctions.
The accommodation bookings website needs to review and change the terms and conditions it imposes on its users if it wants to comply with EU consumer protection standards, according to the Commissioner
The main problem is the lack of transparency in prices and cancellation rules plus there is often incomplete information regarding the hosts.
Brussels issued a warning to the company, informing it that the current model falls foul of laws covering unfair commercial practices and unfair contract terms, as well as controlling the judicial location for dispute resolution.
Vera Jourová hopes the company will, "quickly find the right and correct answers to solve these problems."
If Airbnb ignores or disputes the Commission's arguments, or if it offers solutions that the consumer protection authorities find unsatisfactory, it could be subject to coercive measures, said the Commissioner who stopped short of outlining what punishments the US company may face.
The company said it was, "committed to being as transparent as possible" with its community of users, and is interested in "working together with the authorities to clarify the points raised."
"We take this issue seriously," an Airbnb spokesman said, adding, "Guests are always informed of all fees, including service charges and taxes, before confirming their decision to reserve accommodation advertised on our platform."
That is not the Commission's view, "Prices are not transparent in the initial search as other fees are added at a later stage," said the Commissioner, noting that it is hard to get the total price since charges such as cleaning or supplementary fees are not immediately displayed.
"Guests have the right to be clearly informed of the amounts and the reasons why they are being asked to pay for contracted services, as well as to benefit from fair conditions, for example in case of cancellation of the reservation by the owner," Jourová added.
Speaking to journalists this Monday in Brussels, Jourová also criticized the lack of information on the providers of the contracted service, "It is difficult for the consumer to know if he is renting from a private individual or from a professional, and this is important since different rules of consumer protection apply."
The European authorities say that Airbnb has an obligation to show a balance between the rights and obligations of both parties and not to "deprive consumers of their basic legal rights," for example by unilaterally changing conditions of use, the right to sue a host, to demand reimbursement or payment of damages, or to induce them to go to court in a country other than their place of residence.
Airbnb has had several problems in applying its US business model in Europe. The company has already had to impose number limits after Councils in cities including Amsterdam, Barcelona, Berlin and London complained about the impact of short-term tourist rentals on property prices and changes in the city's residential mix.
Portugal’s government has worked well with Airbnb and insists that property owners display their Alojamento Local reference number on Airbnb and other rental platform listings. Lisbon Council charges a ‘per night’ tax from the US company’s Portuguese subsidiary.
