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Airlines would have to disclose fees under new US proposal

Alan Levin, Justin Sink, Bloomberg News on

Published in News & Features

President Joe Biden will unveil new regulations designed to tackle persistent inflation by requiring airline companies and internet-service providers to be more transparent about hidden fees, as the White House battles rising costs threatening Democrats’ prospects in November elections.

A proposed rule requiring airlines to disclose more information about the fees they charge — such as those levied on passengers for canceling a trip or parents seeking to sit next to their children on a flight — will headline the package, which Biden will unveil at a meeting of the White House Competition Council on Monday.

Biden will also tout expected Federal Communications Commission requirements for internet-service providers to offer a clear breakdown of fees and other charges — similar to the nutrition label found on food purchased at grocery stores — to help consumers more easily comparison shop.

“The president will highlight how companies sneak fees onto bills prevent customers from seeking the full price of what they’re buying upfront, and how they used termination fees to make it harder for consumers to switch their service providers,” White House Press Secretary Karine Jean-Pierre told reporters.

Meantime, in the agricultural sector, the administration is proposing to strengthen competition rules in poultry and livestock markets.

Polling troubles

The efforts come amid the highest inflation in decades, which has damped prospects for Democrats to keep their narrow control of both chambers of Congress in the midterms. A Gallup survey earlier this month found that a 56% majority of Americans say inflation is causing financial hardship for their household, while around eight in 10 Americans rate the economy as “only fair” or “poor,” despite strong employment data.

Biden has planned a series of events throughout the week intended to highlight government efforts to combat rising prices, including one on health-care costs scheduled for Tuesday and a summit on food security planned for Wednesday.

The new airline regulation would require that carriers, travel agents and online-ticket portals display all costs related to baggage options, flight changes and seat selection, the Department of Transportation said in a press release.

 

“Airline passengers deserve to know the full, true cost of their flights before they buy a ticket,” Transportation Secretary Pete Buttigieg said in the release. “This new proposed rule would require airlines to be transparent with customers about the fees they charge, which will help travelers make informed decisions and save money.”

Flight delays

The proposal will dramatically improve consumer protections over more generic disclosure requirements imposed a decade ago, said Charlie Leocha, president of advocacy group Travelers United Inc. But the trade group Airlines for America said carriers, which are fiercely competitive, already offer “transparency to consumers.”

Buttigieg and the airlines have sparred for months over a surge in flight delays and cancellations as travel resumed rapidly in the aftermath of the pandemic. In recent weeks, the Department of Transportation unveiled a new online dashboard that details what services U.S. airlines offer when flights are delayed or canceled — a move the White House says led some carriers to proactively improve offerings for waylaid passengers.

The White House also said action is expected on an FCC proposal for mandatory disclosure of broadband fees. The requirement will help consumers easily comparison shop between internet-service options, which will promote competition and lower prices, the White House said.

The FCC proposed the so-called “broadband nutritional label” in January. Chairwoman Jessica Rosenworcel may ask fellow commissioners to adopt the item this week, said Paloma Perez, an agency spokeswoman.

Broadband providers, in comments to the FCC, said requiring too many details would confuse consumers and burden companies. Consumer advocates in their comments have said the industry’s current disclosures are incomplete and confusing.

©2022 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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