Double Trouble: Airbnb Class Action for Double Ticketing Settles at $6M

Photo by Ann H (Pexels)

Meena AlnajarMeena Alnajar is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School

 

On February 11, 2022, a class action lawsuit against Airbnb for double ticketing settled for $6 million dollars. People who used Airbnb for the first time since October 2015 may be eligible for up to $45 in credit. Vancouver resident Arthur Lin filed the class action in 2017 on the basis that Airbnb appeared to charge Lin $122 a night for what he booked as a $108 night on the app. The act of charging a consumer the higher of two or more prices is known as “double ticketing” and it is a criminal offence in Canada under Section 54 of the Competition Act. This class action signified that parties can be found guilty of double ticketing even in online spaces.

Double ticketing in Canadian law is described as charging a consumer the higher price of two or more prices when it is expressed in the following ways: on a product (its wrapper or container), on anything attached to the product including anything on which the product is mounted for display or sale, on an in-store or other point-of-purchase display or advertisement. Online spaces, such as applications, are not explicitly included in that list as this section was first enacted in 1975. The Section intends to prevent consumers from being deceived or confused by the prices they are charged. Interestingly, prices that are not in-store or at the point of purchase, such as newspaper ads, do not count. This exclusion could give way to online sellers having different prices listed online, as these online prices appear to be neither in-store nor definitively at a point-of-purchase. The Airbnb class action helps clarify how courts may contemplate a Section 54 offence for online retailers.

In its initial arguments, Airbnb claimed that double ticketing did not apply because the two prices for a single accommodation are the price of two different products. The first price reflects the actual accommodation offered by hosts to guests and the higher price is the listing service. Justice Denis Gascon found this pleading to be a mischaracterization of Airbnb’s own products and that it was not plain and obvious that these are two prices for two different products. Airbnb was found guilty of double ticketing, then appealed the decision. On appeal in federal court, the parties reached a settlement of $6 million dollars and Airbnb avoided admitting liability. Person(s) guilty of a Section 54 offence can face a maximum fine of up to $10,000 and/or a year’s imprisonment.

Justice Gascon also indicated that the class action’s Section 54 claim is “unchartered territory” and stretches Section 54’s potential interpretation. However, this class action is not the first Section 54 class action against online sales. On January 26, 2022 it was reported that a class action against WestJet for double ticketing was approved. In that action, the plaintiff argued that WestJet claimed in its published tariff that the first baggage checked would be free yet proceeded to charge passengers anyways. Businesses can take advantage of online sales by posting one price, then adding non-optional fees in the final checkout. The current provision, Section 54 of the Competition Act has not developed to include online price differences in the list of double ticketing offences. These emerging class actions demonstrate how case law can help adapt statutes to changing sale environments and serve as an expensive warning to retailers that hide fees to better market products online.

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