Order 2010-5-31

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the 28th day of May, 2010

FarePortal, Inc. Docket OST 2010-0005

 

 Violations of 49 U.S.C. § 41712 and Served May 28, 2010

 14 CFR 399.84 

CONSENT ORDER

This consent order concerns Internet advertisements by FarePortal, Inc., (FarePortal) that 

violate the full fare advertising requirements specified in 14 CFR Part 399 and a statutory 

prohibition against unfair and deceptive practices and unfair methods of competition, 

49 U.S.C. § 41712. The order directs FarePortal to cease and desist from further such 

regulatory and statutory violations and assesses FarePortal a $50,000 civil penalty in 

compromise of penalties otherwise due and payable. 

FarePortal is a travel agent that sells air transportation, primarily through its Internet 

website. Engaging in such conduct subjects it to the Department’s jurisdiction, including 

49 U.S.C. § 41712 and 14 CFR 399.84. Under 14 CFR 399.84, the Department’s fullfare advertising rule, fare advertisements by air carriers or their agents must state the full 

price to be charged to the consumer. Long-standing enforcement case precedent allows 

taxes and fees collected by carriers and other sellers of air transportation, such as 

passenger facility charges (PFCs) and international departure taxes, to be stated 

separately in advertisements, so long as the charges are levied by a government entity, are 

not ad valorum in nature, i.e., not assessed as a percentage of the fare price, are collected 

on a per-passenger basis, and their existence and amount are clearly indicated at the first 

point a fare is presented so that consumers can easily determine the full-fare to be paid.1

 1

 The Department has issued over 100 cease-and-desist orders enforcing section 399.84 in this manner.

See, e.g., Liberty Travel Inc., Violations of 49 U.S.C. § 41712 and 14 CFR 399.84, Order 2009-2-9 

(February 25, 2009); See also Notice Regarding Prohibition on Deceptive Practices in the Marketing of 

Airfares to the Public Using the Internet, January 18, 2001, at http://airconsumer.ost.dot.gov/rules.htm.

 
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Carrier- or agent-imposed charges, however, may not be broken out of the advertised 

fare.

2

 In Internet advertising displays, the full-fare may be stated on the first screen that 

provides fare quotes, or the existence of permissible separately-stated additional charges 

may be disclosed with a clearly and prominently presented hyperlink that takes

consumers directly to the point on another page that shows the amounts of those 

charges.3 Fare advertisements that do not provide proper notice of taxes and fees at the 

first point a fare is presented or that exclude non-government imposed taxes and fees do 

not comply with section 399.84 or the Department’s enforcement case precedent and 

constitute an unfair and deceptive trade practice in violation of 49 U.S.C. § 41712.4 

FarePortal advertised fares on its Internet homepage, www.cheapoair.com, that did not 

contain appropriate notice of the amount or nature of additional taxes and fees that were 

excluded from the advertised fare at the first point in which it displayed fares by, among 

other things, excluding its “service fee” from those fares and not complying with the 

stringent conditions set forth in Order 2001-12-7 and the December 19, 2001, Revised 

Enforcement Policy on Deceptive Practices Regarding Service Fees Charged by Travel 

Agents in the Marketing and Sale of Airfares to the Public Via the Internet. By this 

conduct, FarePortal violated 14 CFR 399.84, and, in so doing, engaged in unfair and 

deceptive practices and unfair methods of competition in violation of 49 U.S.C. § 41712.

In mitigation, FarePortal makes four points. First, FarePortal asserts that it has always 

provided consumers with the actual service fee and government tax and fee information 

in a manner that it believed, on advice of outside specialists, complied with the 

Department’s enforcement guidance. Second, FarePortal states that on its itinerary 

display pages, consumers were provided a hyperlink to a pop-up containing the fully 

computed fare for each itinerary selected, inclusive of the carrier base fare and carrier 

charges, the service fee, and all government imposed, per passenger ad valorem and nonad valorem fees and charges. Third, FarePortal states that it worked diligently with the 

Department’s staff to resolve all the matters brought to its attention and made several 

changes to the information provided to consumers on its website. Fourth, FarePortal 

points out that it has not received any complaints from consumers regarding any lack of 

clarity of the website or the absence of any information presented relating to the matters 

that the Department has brought to FarePortal’s attention.

 2

 The Department permitted a limited exception, under an exemption issued to Orbitz, provided certain 

very stringent conditions are met, including that the total price, including all taxes, fees, and other charges, 

appears on the same screen with the fare. Application of Orbitz, L.L.C. for an Exemption, to the Extent 

Necessary, Pursuant to 49 U.S.C. § 40109, Order 2001-12-7 (December 7, 2001); Revised Enforcement 

Policy on Deceptive Practices Regarding Service Fees Charged by Travel Agents in the 

Marketing and Sale of Airfares to the Public Via the Internet, December 19, 2001, at 

http://airconsumer.ost.dot.gov/rules/20011219.htm.

3

 See, e.g., In the Matter of Hobbit Travel, Inc., Enforcement Proceeding, OST Docket 2003-15034, 

Order 2003-6-16, (June 10, 2003).

4

 See, e.g., In the Matter of Roni Herskovitz, Individually, and Ultimate Fares, Inc., Enforcement 

Proceeding, OST Docket 2009-0002, Order 2009-11-8 (Nov. 9, 2009).
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The Office of Aviation Enforcement and Proceedings (Enforcement Office) has carefully 

considered the information provided by FarePortal, Inc., but continues to believe that 

enforcement action is warranted. The Department views compliance with Part 399 

seriously. The Enforcement Office and FarePortal, Inc., have reached a settlement of this 

matter in order to avoid litigation. FarePortal, Inc., without admitting the violations 

describe above, consents to the issuance of this order to cease and desist from future 

violations of 49 U.S.C. § 41712 and Part 399 of the Department’s regulations, and to the 

assessment of $50,000 in compromise of potential civil penalties otherwise due and 

payable pursuant to 49 U.S.C. § 46301. 

This compromise assessment is appropriate considering the nature and extent of the 

violations described herein and serves the public interest. It represents an adequate 

deterrence to future noncompliance with the Department’s advertising requirements by 

FarePortal, Inc., as well as by air carriers, travel agents, and other sellers of air 

transportation. 

This order is issued under the authority contained in 49 CFR 1.57a and 14 CFR 385.15.

ACCORDINGLY, 

1. Based on the above discussion, we approve this settlement and the provisions of 

this order as being in the public interest;

2. We find that FarePortal, Inc., violated 14 CFR 399.84 by failing to state the entire 

price to be paid by the consumer at the first point at which the fare is displayed and 

by causing to be published air fare advertisements that improperly excluded its 

service fee from advertised base fares, as described above;

3. We find that by engaging in the conduct and violations described in ordering 

paragraph 2, above, FarePortal, Inc., violated 49 U.S.C. § 41712;

4. We order that FarePortal, Inc., and all other entities owned or controlled by or under 

common ownership with FarePortal, Inc., and their successors and assignees, to 

cease and desist from violations of 49 U.S.C. § 41712 and 14 CFR 399.84;

5. We assess FarePortal, Inc., a compromise civil penalty of $50,000 in lieu of civil 

penalties that might otherwise be assessed for the violations found in ordering 

paragraphs 2 and 3, above. Of this total penalty amount, $25,000 is due and 

payable within 30 days of the date of issuance of this order. The remaining $25,000 

shall become due and payable if FarePortal, Inc., violates this order’s cease and 

desist or payment provisions within one year following the date of issuance of this 

order, in which case the entire unpaid portion of the civil penalty shall become due 

and payable immediately, and FarePortal, Inc., may be subject to additional 

enforcement action for failure to comply with this order. Failure to pay the penalty 

as ordered shall also subject FarePortal, Inc., to the assessment of interest, penalty, 

and collection charges under the Debt Collection Act; and
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6. Payments shall be made by wire transfer through the Federal Reserve 

Communication System, commonly known as “Fed Wire,” to the account of the 

U.S. Treasury in accordance with the attached instructions.

This order will become a final order of the Department 30 days after its service date 

unless a timely petition for review is filed or the Department takes review on its own 

motion.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at

www.regulations.gov