2066 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Rules and Regulations 

FEDERAL TRADE COMMISSION 

16 CFR Part 464 

RIN 3084–AB77 

Trade Regulation Rule on Unfair or 

Deceptive Fees 

AGENCY: Federal Trade Commission. 

ACTION: Final rule. 

SUMMARY: The Federal Trade 

Commission (‘‘FTC’’ or ‘‘Commission’’) 

is issuing a final trade regulation rule 

entitled ‘‘Rule on Unfair or Deceptive 

Fees’’ (‘‘rule’’ or ‘‘final rule’’) and 

Statement of Basis and Purpose 

addressing certain unfair or deceptive 

practices involving fees or charges for 

live-event tickets and short-term 

lodging: bait-and-switch pricing that 

hides the total price by omitting 

mandatory fees and charges from 

advertised prices; and misrepresenting 

the nature, purpose, amount, and 

refundability of fees or charges. The 

final rule specifies that it is an unfair 

and deceptive practice for businesses to 

offer, display, or advertise any price of 

live-event tickets or short-term lodging 

without clearly, conspicuously and 

prominently disclosing the total price. 

The rule also requires businesses to 

clearly and conspicuously make certain 

disclosures before a consumer consents 

to pay. The rule further specifies that it 

is an unfair and deceptive practice for 

businesses to misrepresent any fee or 

charge in any offer, display, or 

advertisement for live-event tickets or 

short-term lodging. 

DATES: This rule is effective May 12, 

2025. 

ADDRESSES: Copies of this document are 

available on the Commission’s website, 

www.ftc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Janice Kopec or Annette Soberats, 

Division of Advertising Practices, 

Bureau of Consumer Protection, Federal 

Trade Commission, 202–326–2550 

(Kopec), 202–326–2921 (Soberats), 

jkopec@ftc.gov, asoberats@ftc.gov. 

SUPPLEMENTARY INFORMATION: 

Statement of Basis and Purpose 

Table of Contents 

I. Background 

A. Advance Notice of Proposed 

Rulemaking 

B. Notice of Proposed Rulemaking 

C. Informal Public Hearing 

II. The Legal Standard for Promulgating the 

Rule 

A. Prevalence of Acts or Practices 

Addressed by the Rule 

B. Manner and Context in Which the Acts 

or Practices Are Deceptive or Unfair 

C. The Economic Effect of the Rule 

III. Section-by-Section Analysis 

A. § 464.1: Definitions 

1. Ancillary Good or Service 

2. Business 

3. Clear(ly) and Conspicuous(ly) 

4. Covered Good or Service 

5. Government Charges 

6. Pricing Information 

7. Shipping Charges 

8. Total Price 

(a) Mandatory Fees 

(b) Maximum Total 

(c) Itemization 

(d) Exclusions From Total Price 

(e) Intersection With IRS Requirements 

B. § 464.2 Hidden Fees Prohibited 

1. § 464.2(a) 

(a) Contingent Fees 

(b) Ticket Service Fees 

(c) Credit Card and Other Payment 

Processing Surcharges 

(d) Dynamic Pricing and National 

Advertising 

(e) Rebates, Bundled Pricing, and Other 

Discounts: Compliance When 

Promotional Pricing Models Have 

Different Fees 

(f) Online Marketplaces 

2. § 464.2(b) 

3. § 464.2(c) 

C. § 464.3 Misleading Fees Prohibited 

D. § 464.4 Relation to State Laws 

E. § 464.5 Severability 

IV. Challenges to the FTC’s Legal Authority 

To Promulgate the Rule 

A. Major Questions Doctrine 

1. The Rule Does Not Address a Major 

Question 

(a) The Commission Has a Long History of 

Addressing Unfair or Deceptive Acts or 

Practices Related to Pricing Information 

(b) Commenters’ Claims About the Scope 

of the Acts or Practices Covered by the 

Rule Are Inapplicable or Overstated 

2. Congress Provided the Commission With 

a Clear Grant of Authority To Promulgate 

This Rule 

B. Non-Delegation Doctrine 

C. First Amendment 

1. Comments 

2. Legal Standard 

3. The Rule’s Disclosure Requirements Are 

Constitutional Under Zauderer 

4. The Rule Does Not Prohibit Truthful 

Speech 

5. The Rule’s Treatment of Credit Card 

Fees and Government Charges Does Not 

Violate the First Amendment 

D. Commission Structure 

E. Administrative Procedure Act 

V. Final Regulatory Analysis Under Section 

22 of the FTC Act 

A. Concise Statement of the Need for, and 

Objectives of, the Final Rule 

B. Alternatives to the Final Rule the 

Commission Considered, Reasons for the 

Commission’s Determination That the 

Final Rule Will Attain Its Objectives in 

a Manner Consistent With Applicable 

Law, and the Reasons the Particular 

Alternative Was Chosen 

C. The NPRM’s Preliminary Regulatory 

Analysis 

D. Significant Issues Raised by Comments, 

the Commission’s Assessment and 

Response, and Any Changes Made as a 

Result 

1. Comments on Costs 

(a) Public Comments: Estimated Costs Are 

Too Low 

(b) Public Comments: Unquantified Costs 

to Firms 

(c) Public Comments: Unquantified Costs 

to Consumers 

(d) Public Comments: Unquantified Costs 

to Third Parties 

(e) Public Comments: Costs From 

Incorporating Contingent Fees Into Total 

Price 

2. Comments on Benefits 

(a) Public Comments: Benefits Are Too 

High 

(b) Public Comments: Unquantified 

Benefits 

3. Comments on the Economy-Wide BreakEven Analysis 

(a) Public Comments: Break-Even Analysis 

Has Incorrect Assumptions or Contains 

Errors 

(b) Public Comments: Break-Even Analysis 

Is Not Enough To Justify an EconomyWide Rule 

(c) Public Comments: Break-Even Analysis 

Is Satisfactory 

E. Economic Regulatory Analysis of the 

Final Rule’s Costs and Benefits 

1. Economic Rationale for the Final Rule 

(a) Shrouded Pricing as a Cause of Market 

Failure 

(b) Shrouded Pricing as a Source of Biased 

Expectations 

2. Economic Effects of the Final Rule 

(a) General Benefits of the Final Rule 

i. Reductions in Search Costs 

ii. Reductions in Deadweight Loss 

(b) Welfare Transfers 

(c) General Costs of the Final Rule 

3. Quantified Welfare Effects 

(a) Quantified Compliance Costs 

(b) Break-Even Analysis 

i. Sensitivity Analysis: Assume Higher 

Wage Rates 

(c) Quantified Benefits and Costs: LiveEvent Ticketing Industry 

i. Live-Event Ticketing: Estimated Benefits 

of the Final Rule 

(a) Consumer Time Savings When 

Shopping for Live-Event Tickets 

(b) Additional Unquantified Benefits: 

Reductions in Deadweight Loss and 

Abandoned Transactions 

ii. Live-Event Ticketing: Estimated Costs of 

the Final Rule 

iii. Live-Event Ticketing: Net Benefits 

iv. Live-Event Ticketing: Uncertainties 

(d) Quantified Benefits and Costs: ShortTerm Lodging Industry 

i. Short-Term Lodging: Estimated Benefits 

of the Final Rule 

(a) Search Statistics 

(b) U.S. Hotels and Home Shares 

(c) Foreign Hotels and Home Shares With 

U.S.-Facing websites 

(d) All Hotels and Home Shares 

(e) Additional Unquantified Benefits: 

Reductions In Deadweight Loss and 

Abandoned Transactions 

ii. Short-Term Lodging: Estimated Costs of 

the Final Rule 

(a) Panel A: U.S. Hotels and Home Share 

Hosts 

(b) Panel B: Foreign Hotels and Home 

Share Hosts 


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1FTC–2023–0064–0886 (Individual Commenter). 

2FTC–2023–0064–1576 (Individual Commenter). 

(c) Panel C: All Hotels and Home Share 

Hosts (US + Foreign) 

iii. Short-Term Lodging: Net Benefits 

iv. Short-Term Lodging: Uncertainties 

4. Economic Evaluation of Alternatives 

5. Summary of Results 

6. Appendix A: Model of Market Distortion 

Caused by Drip Pricing 

7. Appendix B: Short-Term Lodging 

Industry Minutes per Listing 

Calculations 

(a) Low-End Estimate of Minutes per 

Listing Calculation 

(b) High-End Estimate of Minutes per 

Listing Calculation 

VI. Paperwork Reduction Act 

A. Disclosures Related to Final § 464.2(a) 

Through (c) 

1. Number of Respondents 

2. Estimated One-Time Hour Burden 

3. Estimated One-Time Labor Costs 

4. Estimated One-Time Non-Labor Costs 

5. Projected Labor Costs Likely 

Overestimated 

B. Prohibited Misrepresentations Under 

Final § 464.3 

VII. Regulatory Flexibility Act—Final 

Regulatory Flexibility Analysis 

A. Statement of the Need for, and 

Objectives of, the Rule 

B. Significant Issues Raised by Comments, 

the Commission’s Assessment and 

Response, and Any Changes Made as a 

Result 

C. Comment by the Small Business 

Administration, Office of Advocacy, the 

Commission’s Assessment and Response, 

and Any Changes Made as a Result 

D. Description and Estimate of the Number 

of Small Entities To Which the Rule Will 

Apply 

E. Description of the Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

F. Discussion of Significant Alternatives 

the Commission Considered That Would 

Accomplish the Stated Objectives of the 

Final Rule and That Would Minimize 

Any Significant Economic Impact of the 

Final Rule on Small Entities 

VIII. Congressional Review Act 

I. Background 

When shopping for a good or service, 

consumers want to know: how much? It 

is a bedrock principle of FTC law that 

price is material to a consumer’s 

decision about whether to purchase a 

good or service. Consumers look for 

prices to comparison shop and to weigh 

what a good or service might be worth. 

Most consumers also rely on price to 

answer critical budgeting questions 

such as: Can I afford this hotel or shortterm rental for my upcoming vacation? 

Can I afford these concert tickets? 

Unfortunately, consumers face 

widespread and growing unfair and 

deceptive fee practices that make it 

much harder to find out: how much will 

this cost? 

There is nothing new about 

businesses using bait-and-switch tactics 

to reel in and deceive consumers. The 

Commission has a long history of 

bringing enforcement actions against 

these unfair and deceptive practices. 

Quoting a misleading, artificially low 

price and then adding in mandatory fees 

and other charges throughout the buying 

process—a practice known today as drip 

pricing—is a quintessential example of 

bait-and-switch pricing and is a practice 

that falls squarely within the scope of 

the Commission’s long history of work 

to protect consumers. While today this 

practice goes by a different name, the 

playbook has not changed: lure in 

consumers with a low price, then hit 

them with a higher price after they have 

invested in the transaction and sunk 

time and effort into trying to buy a good 

or service for an illusory price. 

Behavioral and economic research 

explains that piecemeal numbers and 

explanations cannot cure the deception 

or mitigate the harms to consumers 

when businesses employ these pricing 

tactics. Often consumers finish the 

transaction without an accurate 

understanding of the total price of goods 

or services. 

In recent years, bait-and-switch 

pricing has garnered widespread public 

attention. Consumers have cried foul 

when they discovered the cost of their 

hotel stays were significantly higher 

than expected due to a mandatory, 

hidden ‘‘resort fee,’’ typically charged 

for services that consumers expected to 

be a part of staying in a hotel. 

Consumers have also complained when 

they tried to purchase tickets to a live 

event, only to find out that the quoted 

ticket price almost doubled by the time 

they reached the final checkout page. 

Consumers have confronted a host of 

mysterious, mandatory, ‘‘convenience,’’ 

‘‘processing,’’ or ‘‘service’’ charges that 

are either non-descript or otherwise 

misleading. These practices are 

frustrating for consumers when they 

shop for travel and entertainment 

especially because these purchases can 

be significant expenditures. This 

rulemaking record is replete with 

individual stories of consumers 

inundated by bait-and-switch pricing 

and misleading fees and charges. 

For example, an individual 

commenter lamented the pervasiveness 

of bait-and-switch pricing tactics across 

everyday purchases: 

Like almost every American consumer, I 

have had to pay these ‘‘junk fees’’ in various 

circumstances. I consider myself reasonably 

well informed, yet have been surprised by 

them, because they keep [c]ropping up in 

unexpected places. Like many, I’ve 

experienced them in hotels, with car rentals 

and telecom providers. In these instances, the 

consumer has no real recourse, as the 

bargaining power is wholly unequal. 

However, these fees are now impacting every 

aspect of commerce. ‘‘Convenience’’ fees 

have impacted me with food service. 

‘‘Facility’’ fees charges at fitness facilities. 

Credit card fees in excess of the actual 

interchange fees being charged at restaurants. 

It’s endless, ubiquitous and makes it 

extremely difficult for consumers to make 

informed decisions.1

As another individual commenter 

aptly put it, ‘‘It’s one thing to be on 

guard when walking down a dark alley, 

but being on guard every time you want 

to take a vacation, go to a concert, fly 

home to see a sick loved one—that’s just 

not fair.’’ 2

It is no surprise that, once bait-andswitch pricing tactics are used by some 

businesses to obscure the cost of a good 

or service, they tend to spread. 

Businesses that want to compete on the 

true price of their offering are undercut 

by businesses that use hidden or 

misleading fees to display an artificially 

low price. As studies confirm, in such 

instances, consumers cannot shop for 

price effectively. This forces businesses 

into a race to the bottom and results in 

more and more businesses using hidden 

and misleading fees to remain 

competitive. When these types of fees 

are eventually revealed, consumers are 

left frustrated with a new and 

unexpected higher price and misleading 

fees and charges that prevent them from 

having a real understanding of what 

they are getting in return for these 

additional fees. 

The Rule on Unfair or Deceptive Fees 

addresses these problems directly in the 

live-event ticketing industry and the 

short-term lodging industry, which 

includes temporary sleeping 

accommodations at a hotel, motel, inn, 

short-term rental, vacation rental, or 

other place of lodging. These two 

industries have engaged in bait-andswitch pricing tactics for years. The rule 

ensures that when businesses advertise 

a price for live-event tickets or shortterm lodging, it is the total price, and 

when they explain a fee or charge, the 

description is truthful. In simple terms: 

tell consumers the real price and do not 

lie about the fees or charges. The final 

rule does this by addressing two specific 

and prevalent unfair and deceptive 

practices: (1) bait-and-switch pricing 

that hides the total price of live-event 

tickets and short-term lodging by 

omitting mandatory fees and charges 

from advertised prices, including 

through drip pricing, and (2) 

misrepresenting the nature, purpose, 

amount, and refundability of fees or 

charges. The rule has two main 


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2068 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Rules and Regulations 

3Advance notice of proposed rulemaking; request 

for public comment: Unfair or Deceptive Fees Trade 

Regulation Rule Commission Matter No. R207011, 

87 FR 67413 (Nov. 8, 2022). The ANPR and other 

documents pertaining to this rulemaking are 

available on the FTC web page, Rulemaking: Unfair 

or Deceptive Fees, https://www.ftc.gov/legal-library/ 

browse/rules/rulemaking-unfair-or-deceptive-fees. 

4 15 U.S.C. 57a(b)(2). Section 18 authorizes the 

Commission to promulgate, modify, or repeal trade 

regulation rules that define with specificity acts or 

practices that are unfair or deceptive in or affecting 

commerce within the meaning of section 5(a)(1) of 

the FTC Act, 15 U.S.C. 45(a)(1). 

5Notice; extension of public comment period: 

Unfair or Deceptive Fees Trade Regulation Rule, 88 

FR 4796 (Jan. 25, 2023). 

6Publicly posted comments are available to view 

through Regulations.gov under Docket ID FTC– 

2022–0069 at https://www.regulations.gov/docket/ 

FTC-2022-0069/comments. 

7Notice of proposed rulemaking; request for 

public comment: Trade Regulation Rule on Unfair 

or Deceptive Fees, 88 FR 77420 (Nov. 9, 2023). In 

accordance with section 18(b)(2)(C) of the FTC Act, 

15 U.S.C. 57a(b)(2)(C), on October 10, 2023, the 

Commission sent notices to the House Committee 

on Energy and Commerce and the Senate 

Committee on Commerce, Science and 

Transportation seeking comment concerning the 

utility and scope of the trade regulation rule 

proposed in the NPRM and including the full text 

of the NPRM. 

8NPRM, 88 FR 77483. 

9Notice of proposed rulemaking; extension of 

public comment period: Trade Regulation Rule on 

Unfair or Deceptive Fees, 89 FR 38 (Jan. 2, 2024). 

10Publicly available comments are available to 

view through Regulations.gov under Docket ID 

FTC–2023–0064 at https://www.regulations.gov/ 

document/FTC-2023-0064-0001/comment. As noted 

on Regulations.gov, not every comment is made 

publicly available. For example, ‘‘[a]gencies may 

redact or withhold certain Comment Submissions 

. . . , such as those containing . . . duplicate/near 

duplicate examples of a mass-mail campaign. 

Therefore, the total in the Number of Comments 

Posted Box may be lower than the total in the 

Comments Received Box.’’ See https://

www.regulations.gov/faq, Frequently Asked 

Questions, General FAQs, Find Dockets, 

Documents, and Comments FAQs, answer to How 

are Comments counted and posted to 

Regulations.gov?. In this rulemaking, 

Regulations.gov identified ten mass-mail campaigns 

as part of the total number of comments received 

components. First, the final rule 

requires businesses that offer a price for 

live-event tickets or short-term lodging 

to disclose the total price, inclusive of 

most mandatory charges, and to make 

sure that the total price is disclosed 

more prominently than other pricing 

information, except the final amount of 

payment. Second, the final rule 

prohibits misrepresentations about fees 

or charges in any offer, display, or 

advertisement for live-event tickets and 

short-term lodging. 

The final rule is tailored to target 

these specific unfair and deceptive 

pricing practices, while preserving 

flexibility for live-event ticket and shortterm lodging businesses. The rule does 

not prohibit any one type of fee, nor 

does it prohibit specific pricing 

practices such as itemization of fees or 

dynamic pricing. The rule does not 

require that all fees be included when 

offering a price—just mandatory ones. 

The rule gives businesses discretion to 

list optional fees selected by the 

consumer and government and shipping 

charges separately. The discretion to set 

prices remains squarely with 

businesses; the rule simply requires that 

they tell consumers the truth about 

prices for live-event tickets and shortterm lodging. 

A. Advance Notice of Proposed 

Rulemaking 

The Commission published, on 

November 8, 2022, an advance notice of 

proposed rulemaking (‘‘ANPR’’) 3 under 

the authority of section 18 of the Federal 

Trade Commission Act (‘‘FTC Act’’) 4 to 

address certain unfair or deceptive acts 

or practices involving fees. The ANPR 

described the Commission’s history of 

taking law enforcement action against, 

and educating consumers about, unfair 

or deceptive practices relating to fees, 

and it asked a series of questions to help 

inform the Commission about whether 

such practices are prevalent and, if so, 

whether and how to proceed with a 

notice of proposed rulemaking 

(‘‘NPRM’’). The Commission was 

particularly interested in the following 

practices that it identified as the 

subjects of investigations, enforcement 

actions, workshops, research, and 

consumer education: (a) 

misrepresenting or failing to disclose 

clearly and conspicuously, on any 

advertisement or in any marketing, the 

total price of any good or service for 

sale; (b) misrepresenting or failing to 

disclose clearly and conspicuously, on 

any advertisement or in any marketing, 

the existence of any fees, interest, 

charges, or other costs that are not 

reasonably avoidable for any good or 

service; (c) misrepresenting or failing to 

disclose clearly and conspicuously 

whether fees, interest, charges, 

products, or services are optional or 

required; (d) misrepresenting or failing 

to disclose clearly and conspicuously 

any material restriction, limitation, or 

condition concerning any good or 

service that may result in a mandatory 

charge in addition to the cost of the 

good or service or that may diminish the 

consumer’s use of the good or service, 

including the amount the consumer 

receives; (e) misrepresenting that a 

consumer owes payments for any 

product or service the consumer did not 

agree to purchase; (f) billing or charging 

consumers for fees, interest, goods, 

services, or programs without express 

and informed consent; (g) billing or 

charging consumers for fees, interest, 

goods, services, or programs that have 

little or no added value to the consumer 

or that consumers would reasonably 

assume to be included within the 

overall advertised price; and (h) 

misrepresenting or failing to disclose 

clearly and conspicuously, on any 

advertisement or in any marketing, the 

nature or purpose of any fees, interest, 

charges, or other costs. 

The Commission specifically sought 

public comment on the prevalence of 

such practices and the costs and 

benefits of a rule that would require 

upfront inclusion of mandatory fees 

whenever consumers are quoted a price, 

including by asking a series of questions 

to solicit data and commentary. The 

Commission took comments for sixty 

days, extended the comment period by 

an additional thirty days,5 and carefully 

considered the more than 12,000 

comments received.6

B. Notice of Proposed Rulemaking 

Based on the substance of the 

comments received in response to the 

ANPR, as well as the Commission’s 

history of enforcement and other 

information, on November 9, 2023, the 

Commission published an NPRM, 

which proposed an industry-neutral 

rule that would prohibit 

misrepresenting the total price of goods 

or services by omitting mandatory fees 

from advertised prices and 

misrepresenting the nature and purpose 

of fees.7 The NPRM described the 

comments received in response to the 

ANPR and examined the Commission’s 

prior enforcement actions and other 

responses concerning unfair and 

deceptive fees. In the NPRM, the 

Commission stated that it has reason to 

believe that certain unfair or deceptive 

acts or practices involving fees are 

prevalent, specifically: (1) 

misrepresenting the total price of goods 

and services by omitting mandatory fees 

from advertised prices and (2) 

misrepresenting the nature and purpose 

of fees. After discussing the comments 

and explaining its considerations in 

developing a proposed rule, the 

Commission also posed specific 

questions for comment and provided 

explanation of the proposed rule text. 

Finally, the NPRM set out the 

Commission’s proposed regulatory text.8

The Commission took public comments 

for sixty days, and extended the 

comment period for an additional thirty 

days.9

In response to the NPRM, the 

Commission received over 60,800 

comments from stakeholders 

representing a wide range of viewpoints 

and industries.10 These stakeholders 


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of over 60,800. One mass-mail campaign alone 

accounted for close to 48,200 comments, and all 

mass-mail campaigns combined accounted for more 

than 57,400 comments. Because comments within 

each mass-mail campaign are highly similar, only 

representative comments of each mass-mail 

campaign are publicly posted on Regulations.gov. 

In addition to representative mass-mail comments, 

the more than 3,300 comments that Regulations.gov 

did not identify as belonging to a mass-mail 

campaign are publicly posted. The Commission 

received and considered all filed comments, 

including all mass-mail comments. 

11See, e.g., FTC–2023–0064–3135 (U.S. Senate, 

Sen. Robert P. Casey, Jr.); FTC–2023–0064–3271 

(U.S. Senate, Sen. Amy Klobuchar); FTC–2023– 

0064–2858 (U.S. House of Representatives, Rep. 

Maxwell Alejandro Frost, Rep. Jimmy Gomez, Rep. 

Barbara Lee, Rep. Rashida Tlaib, Rep. Kevin Mullin, 

Rep. Dwight Evans, Rep. Judy Chu, Rep. Greg Casar, 

Rep. Dan Goldman, Rep. Salud Carbajal). 

12See, e.g., FTC–2023–0064–1411 (Arizona 

House of Representatives, Rep. Analise Ortiz); FTC– 

2023–0064–2938 (Colorado House of 

Representatives, Rep. Naquetta Ricks); FTC–2023– 

0064–2926 (Florida House of Representatives, Rep. 

Rita Harris); FTC–2023–0064–3081 (Florida House 

of Representatives, Rep. Anna V. Eskamani); FTC– 

2023–0064–3103 (Florida House of Representatives, 

Rep. Angela Nixon); FTC–2023–0064–3117 

(Maryland House of Delegates, Del. Julie Palakovich 

Carr); FTC–2023–0064–2341 (Massachusetts House 

of Representatives, Rep. Lindsay Sabadosa); FTC– 

2023–0064–3072 (Michigan Senate and House of 

Representatives, Sen. Darrin Camilleri, Sen. Mary 

Cavanagh, and Rep. Betsy Coffia); FTC–2023–0064– 

3079 (Montana State Senate, Senate Democratic 

Caucus, Sen. Pat Flowers, Sen. Susan Webber, Sen. 

Andrea Olsen, Sen. Edie McClafferty, Sen. Jen 

Gross, Sen. Janet Ellis, Sen. Shane Morigeau, Sen. 

Ellie Boldman, Sen. Ryan Lynch, Sen. Christopher 

Pope, Sen. Mike Fox, Sen. Denise Hayman, Sen. 

Willis Curdy, and Sen. Mary Ann Dunwell); FTC– 

2023–0064–3184 (New York Senate, Sen. Michael 

Gianaris); FTC–2023–0064–3123 (Syracuse, New 

York, City Auditor Alexander Marion); FTC–2023– 

0064–3149 (North Carolina House of 

Representatives, Rep. Julie von Haefen); FTC–2023– 

0064–3237 (North Carolina House of 

Representatives, Rep. Pricey Harrison). 

13See, e.g., FTC–2023–0064–3150 (Attorney 

General of the State of California); FTC–2023–0064– 

3215 (Attorneys General of the States of North 

Carolina and Pennsylvania, along with Attorneys 

General of the States or Territories of Arizona, 

Colorado, Connecticut, Delaware, District of 

Columbia, Hawaii, Illinois, Maine, Michigan, 

Minnesota, New Jersey, New York, Oklahoma, 

Oregon, Vermont, Washington, and Wisconsin). 

14See, e.g., FTC–2023–0064–3134 (U.S. 

Department of Transportation, Federal Motor 

Carrier Safety Administration); FTC–2023–0064– 

3187 (U.S. Department of Justice, Antitrust 

Division). 15See, e.g., FTC–2023–0064–1519 (New York City 

Department of Consumer and Worker Protection); 

FTC–2023–0064–2883 (District of Columbia, Office 

of the People’s Counsel); FTC–2023–0064–3196 

(South Carolina Department of Consumer Affairs). 16See, e.g., FTC–2023–0064–1028 (Complex 

Trauma Project); FTC–2023–0064–2885 (AARP); 

FTC–2023–0064–3104 (Truth in Advertising, Inc.); 

FTC–2023–0064–3160 (Consumer Federation of 

America on behalf of itself and 51 other national 

and State consumer advocacy groups, authored by 

American Economic Liberties Project, Consumer 

Action, Consumer Federation of America, National 

Association of Consumer Advocates, National 

Consumer Law Center, National Consumers League, 

U.S. Public Interest Research Group); FTC–2023– 

0064–3162 (BBB National Programs, Inc.); FTC– 

2023–0064–3191 (Community Catalyst and 32 other 

organizations focused on health care and consumer 

protection issues); FTC–2023–0064–3205 

(Consumer Reports); FTC–2023–0064–3216 

(Demand Progress Education Fund); FTC–2023– 

0064–3218 (National Consumer Law Center); FTC– 

2023–0064–3242 (William E. Morris Institute for 

Justice); FTC–2023–0064–3246 (Coalition for App 

Fairness); FTC–2023–0064–3248 (DC Jobs With 

Justice on behalf of Fair Price, Fair Wage Coalition); 

FTC–2023–0064–3259 (National Women’s Law 

Center); FTC–2023–0064–3270 (Consumer 

Federation of America, National Consumer Law 

Center, and National Association of Consumer 

Advocates); FTC–2023–0064–3290 (U.S. Public 

Interest Research Group Education Fund); FTC– 

2023–0064–3302 (Public Citizen). 

17See, e.g., FTC–2023–0064–1431 (McPherson 

Housing Coalition); FTC–2023–0064–2851 (Housing 

Action Illinois); FTC–2023–0064–3102 (Corporation 

for Supportive Housing); FTC–2023–0064–3235 

(National Housing Law Project). 18See, e.g., FTC–2023–0064–2915 (Voice of the 

Experienced); FTC–2023–0064–2696 (Safe Return 

Project); FTC–2023–0064–3253 (Fortune Society); 

FTC–2023–0064–3260 (Formerly Incarcerated, 

Convicted People & Families Movement, in 

collaboration with the Partnership for Just 

Housing); FTC–2023–0064–3283 (National 

Consumer Law Center, Prison Policy Initiative, and 

advocate Stephen Raher). 

19See, e.g., FTC–2023–0064–1939 (Tzedek DC, 

David A. Clarke School of Law, University of the 

District of Columbia); FTC–2023–0064–2888 

(Housing Policy Clinic, University of Texas School 

of Law); FTC–2023–0064–3146 (Institute for Policy 

Integrity, New York University School of Law); 

FTC–2023–0064–3255 (Carrie Floyd, Clinical 

Teaching Fellow, Veterans Legal Clinic, and Mira 

Edmonds, Clinical Assistant Professor of Law, CivilCriminal Litigation Clinic, University of Michigan 

Law School); FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice, 

University of California, Berkeley School of Law, 

and Consumer Law Advocates, Scholars & Students 

Network); FTC–2023–0064–3268 (Housing & 

Eviction Defense Clinic, University of Connecticut 

School of Law). 

20See, e.g., FTC–2023–0064–1294 (James J. 

Angel, Ph.D., CFP, CFA, Professor, Georgetown 

University, McDonough School of Business); FTC– 

2023–0064–1467 (Richard J. Peltz-Steele, 

Chancellor Professor, University of Massachusetts 

Law School). 

21See, e.g., FTC–2023–0064–2862 (Legal Aid 

Foundation of Los Angeles); FTC–2023–0064–2892 

(Community Legal Services of Philadelphia); FTC– 

2023–0064–2920 (Colorado Poverty Law Project); 

FTC–2023–0064–3090 (Atlanta Legal Aid Society, 

Inc.); FTC–2023–0064–3225 (CED Law); FTC–2023– 

0064–3278 (Southeast Louisiana Legal Services). 

22See, e.g., FTC–2023–0064–2840 (Indie Sellers 

Guild); FTC–2023–0064–2901 (E-Merchants Trade 

Council, Inc.). 

23See, e.g., FTC–2023–0064–2856 (National 

Football League); FTC–2023–0064–3108 (Christian 

L. Castle, Esq.; Mala Sharma, President, Georgia 

Music Partners; and Dr. David C. Lowery, founder 

of musical groups Cracker and Camper Van 

Beethoven, and a lecturer at the University of 

Georgia Terry College of Business); FTC–2023– 

0064–3122 (Vivid Seats); FTC–2023–0064–3195 

(League of American Orchestras on behalf of itself 

and Association of Performing Arts Professionals, 

Carnegie Hall, Dance/USA, Folk Alliance 

International, Future of Music Coalition, National 

Performance Network, OPERA America, PAVA— 

Performing Arts Venues Alliance, Performing Arts 

Alliance, and Theatre Communications Group); 

FTC–2023–0064–3212 (TickPick, LLC); FTC–2023– 

0064–3230 (Future of Music Coalition); FTC–2023– 

0064–3250 (National Independent Talent 

Organization); FTC–2023–0064–3266 (StubHub, 

Inc.); FTC–2023–0064–3292 (National Association 

of Theatre Owners); FTC–2023–0064–3304 

(Recording Academy); FTC–2023–0064–3306 (Live 

Nation Entertainment and its subsidiary 

Ticketmaster North America); FTC–2023–0064– 

3105 (Charleston Symphony); FTC–2023–0064– 

3241 (National Association of Ticket Brokers). 

24See, e.g., FTC–2023–0064–3077 (Far Horizons 

Travel); FTC–2023–0064–3094 (American Hotel & 

Lodging Association); FTC–2023–0064–3106 

(American Society of Travel Advisors, Inc.); FTC– 

2023–0064–3204 (Expedia Group); FTC–2023– 

0064–3244 (Vacation Rental Management 

Association). 

included numerous individual 

consumers and consumer groups who 

described examples and experiences 

with the unfair and deceptive fee 

practices identified by the Commission. 

Commenters also included a range of 

business owners, trade associations, and 

other industry groups; academics; and 

government officials and agencies from 

all levels of government. While some 

commenters raised concerns and 

recommended specific modifications to, 

or exemptions from, the Commission’s 

proposal, the overwhelming majority of 

commenters strongly supported the 

Commission’s proposed rule. 

The proposed rule received 

widespread support in comments from 

Federal,11 State, and local 12 elected 

officials; State Attorneys General; 13

Federal,14 State, and local 15 government 

agencies; public policy and consumer 

advocates,16 including housing 

advocates 17 and advocates for the 

incarcerated or formerly incarcerated; 18

university public policy advocates and 

clinics; 19 academics; 20 legal services 

providers; 21 and industry members 

from a broad range of market sectors, 

including online merchants,22 liveevent ticketing,23 and hotels and other 

short-term lodging.24 These commenters 

supporting the rule confirmed the 

prevalence of hidden and 

misrepresented fees throughout the 

economy, across large and small 

industries subject to the Commission’s 

jurisdiction, ranging, for example, from 

travel, live events, restaurants, delivery, 

rental housing, and correctional services 

to carpet cleaning, dietary supplements, 

moving companies, and gyms. These 

commenters supported the rule for its 

benefits to both consumers and honest 

businesses. 

Individual consumers 

overwhelmingly supported the rule. Out 

of 60,853 total comments received, a 

mass mailing of close to 48,186 

consumer commenters stated that they 

supported ‘‘the FTC’s efforts to protect 

American consumers and crack down 

on unscrupulous businesses that tack on 

junk fees at the end of the purchasing 

process,’’ and urged the Commission ‘‘to 

pass this rule to not only save 

consumers tens of billions of dollars 

each year, but to level the playing field 

for honest businesses who are 

transparent about their costs and 


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25See, e.g., FTC–2023–0064–0962, FTC–2023– 

0064–1186, FTC–2023–0064–1219, FTC–2023– 

0064–1230, FTC–2023–0064–1826, FTC–2023– 

0064–1827, FTC–2023–0064–1933, FTC–2023– 

0064–1946. 

26See, e.g., FTC–2023–0064–2290. 

27See, e.g., FTC–2023–0064–3156. 

28See, e.g., FTC–2023–0064–2962. 

29See, e.g., FTC–2023–0064–2964. 

30U.S. Small Bus. Admin., Office of Advocacy, 

Re: Trade Regulation Rule on Unfair or Deceptive 

Fees FTC–2023–0064–0001, https://

advocacy.sba.gov/wp-content/uploads/2024/03/ 

Comment-Letter-Trade-Regulation-Rule-on-Unfairor-Deceptive-Fees.pdf. 

31See, e.g., FTC–2023–0064–2367 (Small 

Business Majority); FTC–2023–0064–2887 

(Progressive Policy Institute); FTC–2023–0064–2919 

(National Automatic Merchandising Association); 

FTC–2023–0064–3028 (Competitive Enterprise 

Institute); FTC–2023–0064–3016 (National 

Federation of Independent Business, Inc.); FTC– 

2023–0064–3127 (U.S. Chamber of Commerce); 

FTC–2023–0064–3128 (Merchants Payments 

Coalition); FTC–2023–0064–3137 (Chamber of 

Progress); FTC–2023–0064–3140 (Merchant 

Advisory Group); FTC–2023–0064–3145 

(Association of National Advertisers, Inc.); FTC– 

2023–0064–3147 (American Land Title 

Association); FTC–2023–0064–3173 (Center for 

Individual Freedom); FTC–2023–0064–3186 

(National LGBT Chamber of Commerce and 

National Asian/Pacific Islander American Chamber 

of Commerce & Entrepreneurship); FTC–2023– 

0064–3208 (FreedomWorks); FTC–2023–0064–3267 

(National Retail Federation). 

32See, e.g., FTC–2023–0064–3100 (Civitas 

Advisors, Inc.); FTC–2023–0064–3126 (Tax 

Foundation); FTC–2023–0064–3258 (National 

Taxpayers Union Foundation). 

33See, e.g., FTC–2023–0064–2891 (Mary 

Sullivan, George Washington University, Regulatory 

Studies Center); FTC–2023–0064–3264 (Mark J. 

Perry, Ph.D., Professor Emeritus of Economics at 

University of Michigan-Flint and Senior Fellow 

Emeritus at the American Enterprise Institute). 

34See, e.g., FTC–2023–0064–3121 (National 

Independent Automobile Dealers Association); 

FTC–2023–0064–3189 (National Automobile 

Dealers Association); FTC–2023–0064–3206 (Motor 

Vehicle Protection Products Association, 

Guaranteed Asset Protection Alliance, and Service 

Contract Industry Council); FTC–2023–0064–3276 

(Automotive Service Association). 

35See, e.g., FTC–2023–0064–3263 (Flex 

Association); FTC–2023–0064–3202 (TechNet). 

36See, e.g., FTC–2023–0064–1425 (Iowa Bankers 

Association); FTC–2023–0064–1941 (Independent 

Bankers Association of Texas); FTC–2023–0064– 

2574 (BattleLine LLC via Investor Protection 

Initiative); FTC–2023–0064–2893 (America’s Credit 

Unions); FTC–2023–0064–3119 (Money Services 

Business Association, Inc.); FTC–2023–0064–3138 

(Independent Community Bankers of America); 

FTC–2023–0064–3139 (American Bankers 

Association and Consumer Bankers Association); 

FTC–2023–0064–3142 (American Escrow 

Association); FTC–2023–0064–3144 (Mortgage 

Bankers Association); FTC–2023–0064–3168 

(American Financial Services Association); FTC– 

2023–0064–3182 (Massachusetts Bankers 

Association). 

37See, e.g., FTC–2023–0064–3141 (Coalition of 

Franchisee Associations); FTC–2023–0064–3211 

(American Association of Franchisees & Dealers); 

FTC–2023–0064–3294 (International Franchise 

Association). 

38See, e.g., FTC–2023–0064–3066 (Norhart, Inc.); 

FTC–2023–0064–3115 (National Association of 

Residential Property Managers); FTC–2023–0064– 

3116 (Manufactured Housing Institute); FTC–2023– 

0064–3133 (National Multifamily Housing Council 

and National Apartment Association); FTC–2023– 

0064–3152 (Building Owners & Managers 

Association, Council for Affordable & Rural 

Housing, Housing Advisory Group, Institute of Real 

Estate Management, Manufactured Housing 

Institute, National Apartment Association, National 

Association of Home Builders, National Association 

of Residential Property Managers, National Leased 

Housing Association, National Multifamily Housing 

Council, and Real Estate Roundtable). 

39See, e.g., FTC–2023–0064–2981 (Apartment & 

Office Building Association of Metropolitan 

Washington); FTC–2023–0064–3042 (Nevada State 

Apartment Association); FTC–2023–0064–3044 

(San Angelo Apartment Association); FTC–2023– 

0064–3045 (Chicagoland Apartment Association); 

FTC–2023–0064–3089 (Apartment Association of 

Northeast Wisconsin and Fox Valley Apartment 

Association); FTC–2023–0064–3111 (Houston 

Apartment Association); FTC–2023–0064–3172 

(New Jersey Apartment Association); FTC–2023– 

0064–3296 (Bay Area Apartment Association); 

FTC–2023–0064–3311 (Greater Cincinnati Northern 

Kentucky Apartment Association); FTC–2023– 

0064–3312 (Tulsa Apartment Association); FTC– 

2023–0064–3313 (Property Management 

Association of Michigan). 40FTC–2023–0064–3289 (Zillow Group). 41See, e.g., FTC–2023–0064–3262 (Skyscanner); 

FTC–2023–0064–3293 (Travel Technology 

Association). 42See, e.g., FTC–2023–0064–2918 (Elite Catering 

+ Event Professionals); FTC–2023–0064–3078 

(Washington Hospitality Association); FTC–2023– 

0064–3080 (UNITE HERE); FTC–2023–0064–3101 

(High Road Restaurants); FTC–2023–0064–3180 

(Independent Restaurant Coalition); FTC–2023– 

0064–3197 (American Beverage Licensees); FTC– 

2023–0064–3203 (American Pizza Community); 

FTC–2023–0064–3219 (Georgia Restaurant 

Association); FTC–2023–0064–3300 (National 

Restaurant Association). 

43See, e.g., FTC–2023–0064–3065 (Carriage 

Services, Inc.); FTC–2023–0064–3130 (International 

Cemetery, Cremation & Funeral Association); FTC– 

2023–0064–3210 (Service Corporation 

International). 

44See, e.g., FTC–2023–0064–2886 (American 

Gaming Association); FTC–2023–0064–3120 

(Arizona Indian Gaming Association). 

45See, e.g., FTC–2023–0064–3261 (National 

Association of Broadcasters); FTC–2023–0064–2884 

(NTCA—The Rural Broadband Association); FTC– 

2023–0064–3143 (ACA Connects—America’s 

Communications Association); FTC–2023–0064– 

3233 (NCTA—The internet & Television 

Association); FTC–2023–0064–3234 (CTIA—The 

Wireless Association); FTC–2023–0064–3295 

(USTelecom—The Broadband Association). 

46See, e.g., FTC–2023–0064–3033 (The Rebel 

Lounge, Lucky Man Concerts LLC, PHX Fest, 

RelentlessBeats LLC). 

47FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

48See, e.g., FTC–2023–0064–3236 (NCIC Inmate 

Communications); FTC–2023–0064–3284 (Global 

Tel*link Corporation d/b/a ViaPath Technologies). 

49See, e.g., FTC–2023–0064–2906 (National 

Association of College & University Business 

Officers, American Council on Education); FTC– 

2023–0064–3217 (Bowling Proprietors’ Association 

of America); FTC–2023–0064–3249 (Marine 

Retailers Association of the Americas); FTC–2023– 

0064–3251 (National RV Dealers Association); FTC– 

2023–0064–3269 (IHRSA—The Health & Fitness 

Association). Towing & Recovery Association of 

America, Inc. submitted a late comment, which the 

Commission considered in its discretion and makes 

available at https://www.ftc.gov/system/files/ftc_

gov/pdf/R207011TRAAComment.pdf. 

fees.’’ 25 Other mass mailings contained 

similar comments in support. In a mass 

mailing of about 344 comments, 

consumer commenters made nearidentical statements to the 

aforementioned mass mailing and 

added: ‘‘Junk fees are monies a business 

tacks on at the end of the purchasing 

process instead of being transparent 

about the full price upfront. These fees 

are common when people are 

purchasing airline and concert tickets, 

booking hotel rooms, paying utility 

bills, and renting apartments.’’ 26 A mass 

mailing submitted by about 315 

consumer commenters stated, ‘‘I support 

cracking down on hidden junk fees that 

cost Americans billions of dollars each 

year.’’ 27 A mass mailing by about 

nineteen consumer commenters stated, 

‘‘For too long, individuals have been 

subjected to misleading practices, such 

as the omission of mandatory fees from 

advertised prices and misrepresentation 

of the nature and purpose of fees. These 

practices not only erode trust but also 

hinder informed decision-making by 

consumers.’’ 28 A mass mailing by about 

thirteen consumer commenters simply 

urged: ‘‘Stop junk fees!’’ 29 Additional 

comments from individual consumers 

also supported the rule. 

Other commenters opposed the rule, 

sought exemptions from the rule, or 

expressed concern about the rule’s 

definitions or application to specific 

pricing scenarios. They included a 

Federal government agency; 30 national 

business groups and public policy 

advocates,31 including tax groups and 

advisors; 32 academics; 33

representatives from auto dealers and 

service providers; 34 app-based delivery 

platforms; 35 financial and real estate 

settlement services; 36 franchised 

businesses; 37 representatives of housing 

providers,38 including apartment 

associations 39 and a housing 

advertising platform; 40 hospitality 

groups, including hotel 41 and restaurant 

associations; 42 funeral and cemetery 

providers; 43 gaming associations; 44

telecommunications providers; 45 liveevent venues; 46 a law firm; 47 providers 

of communications services to 

incarcerated people; 48 and other 

sectors.49 The commenters argued that 

the FTC failed to establish the 

prevalence of the defined unfair and 

deceptive practices and failed to 

conduct an adequate cost-benefit 

analysis, and that the proposed rule 

would interfere with established pricing 

models, could not be applied to all 

pricing scenarios, would overlap with 

other laws and regulations, or would 

exceed the FTC’s rulemaking authority 

or jurisdiction. 

Members of the restaurant industry 

voiced opposition to the proposal. A 

mass mailing from about 4,650 


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50See, e.g., FTC–2023–0064–2953, FTC–2023– 

0064–2961, FTC–2023–0064–2972; FTC–2023– 

0064–2971. 

51 Initial notice of informal hearing; final notice 

of informal hearing; list of Hearing Participants; 

requests for submissions from Hearing Participants: 

Trade Regulation Rule on Unfair or Deceptive Fees, 

89 FR 21216 (Mar. 27, 2024). 

52See, e.g., FTC–2023–0064–3127 (U.S. Chamber 

of Commerce); FTC–2023–0064–3143 (ACA 

Connects); FTC–2023–0064–3139 (American 

Bankers Association and Consumer Bankers 

Association); FTC–2023–0064–3294 (International 

Franchise Association); FTC–2023–0064–3233 

(NCTA—The internet & Television Association). 

53The interested parties were: ACA Connects— 

America’s Communication Association; American 

Bankers Association and Consumer Bankers 

Association; U.S. Chamber of Commerce; NCTA— 

The internet & Television Association; International 

Franchise Association; BattleLine LLC; IHRSA— 

The Global Health & Fitness Association; National 

Taxpayers Union Foundation; Consumer Federation 

of America, representing a coalition of 52 national 

and state consumer advocacy groups; Consumer 

Federation of America with National Consumer 

Law Center and National Association of Consumer 

Advocates; Community Catalyst, representing a 

coalition of 33 health and consumer protection 

advocacy groups; National Housing Law Project, 

representing a coalition of 39 housing justice 

advocacy organizations; National Consumer Law 

Center, Prison Policy Initiative, and Stephen Raher; 

Formerly Incarcerated, Convicted People & Families 

Movement; Truth in Advertising, Inc.; National 

Consumer Law Center; and Fair Price, Fair Wage 

Coalition. 

54The interested parties that made documentary 

submissions in connection with the informal 

hearing were: National Taxpayers Union 

Foundation; Community Catalyst; National Housing 

Law Project; Consumer Federation of America; U.S. 

Chamber of Commerce; and NCTA—The internet & 

Television Association. Each of the documentary 

submissions is posted in the Informal Hearing 

Documents folder available at https://www.ftc.gov/ 

legal-library/browse/rules/rulemaking-unfair-ordeceptive-fees. 

55Transcript, Informal Hearing on Proposed 

Trade Regulation Rule on Unfair or Deceptive Fees 

(Apr. 24, 2024), https://www.ftc.gov/system/files/ 

ftc_gov/pdf/transcript-deceptive-fees.pdf. 

56American Bankers Association and Consumer 

Bankers Association and the U.S. Chamber of 

Commerce did not appear at the Informal Hearing 

despite being given the opportunity to do so. 

57See 15 U.S.C. 57a(a)(1)(B). 

58 15 U.S.C. 57a(b)(3). In addition, section 22(b)(2) 

of the FTC Act, 15 U.S.C. 57b–3(b)(2), requires the 

Commission to prepare a final regulatory analysis, 

which it discusses in section V. 

restaurant owners criticized the rule as 

a one-size-fits-all approach that would 

be unworkable for the restaurant 

industry. In addition, members of the 

rental housing industry also submitted 

comments in opposition to the proposed 

rule. A mass mailing from about 3,781 

members of the rental housing industry 

stated that it is virtually impossible to 

predict and disclose in advertisements 

total prices that include all mandatory 

fees that residents could incur during 

lease terms. The Commission does not 

address the specific issues raised by 

these industries and others that fall 

outside the scope of this final rule.50

C. Informal Public Hearing 

On March 27, 2024, the Commission 

published an initial notice of informal 

hearing, which also served as the final 

notice of informal hearing (‘‘Informal 

Hearing Notice’’).51 The Informal 

Hearing Notice was published in 

accordance with section 18(b)(1) of the 

FTC Act, 15 U.S.C. 57a(b)(1), which 

requires the Commission to provide an 

opportunity for an informal hearing in 

section 18 rulemaking proceedings. The 

Informal Hearing Notice identified eight 

commenters to the NPRM that requested 

an informal hearing in accordance with 

the requirements of 16 CFR 1.11(e), as 

well as nine additional commenters that 

requested the opportunity to make an 

oral presentation if the Commission was 

to hold an informal hearing at others’ 

requests. A number of commenters, 

including several who requested an 

informal hearing, proposed potential 

disputed issues of material fact for the 

Commission’s consideration.52 The 

Commission reviewed these potential 

issues and concluded in its Informal 

Hearing Notice that there were no 

disputed issues of material fact to 

resolve at the hearing. 

On April 24, 2024, the Commission 

conducted an informal public hearing. 

In the Informal Hearing Notice, which 

was formally approved by vote of the 

Commission, the Commission’s Chief 

Presiding Officer, the Chair, designated 

the Honorable Jay L. Himes, an 

Administrative Law Judge for the 

Federal Trade Commission, to serve as 

the presiding officer of the informal 

hearing. Seventeen interested parties 

were identified in the Informal Hearing 

Notice,53 and six of them made 

documentary submissions in support of 

their hearing testimony.54 Fifteen 

interested parties made presentations,55

and two did not appear at the hearing.56

The majority of interested parties that 

appeared spoke in support of the 

proposed rule. However, several voiced 

opposition to the rule, explained 

perceived problems with the proposed 

rule text, or argued that the Commission 

incorrectly concluded that there were 

no disputed issues of material fact 

raised in response to the NPRM. 

II. The Legal Standard for Promulgating 

the Rule 

The Commission is promulgating 16 

CFR part 464 (‘‘final rule’’ or ‘‘rule’’) 

pursuant to section 18 of the FTC Act, 

15 U.S.C. 57a, which authorizes the 

Commission to promulgate, modify, and 

repeal trade regulation rules that define 

with specificity acts or practices in or 

affecting commerce that are unfair or 

deceptive within the meaning of section 

5(a)(1) of the FTC Act, 15 U.S.C. 

45(a)(1).57 Whenever the Commission 

promulgates a rule under section 

18(a)(1)(B), the rule must include a 

Statement of Basis and Purpose (‘‘SBP’’) 

that addresses: (1) the prevalence of the 

acts or practices addressed by the rule; 

(2) the manner and context in which the 

acts or practices are unfair or deceptive; 

and (3) the economic effect of the rule, 

taking into account the effect on small 

businesses and consumers.58 The 

Commission summarizes in this section 

its findings regarding each of these 

requirements. 

Substantial evidence exists 

supporting the prevalence of bait-andswitch pricing and misleading fees and 

charges economy-wide as well as in the 

live-event ticketing and short-term 

lodging industries. As documented by 

the rulemaking record, the 

Commission’s work on these pricing 

issues for over a decade, and the 

complementary actions of the 

Commission’s local, State, and 

international counterparts, these 

specific practices are widespread across 

the economy and are harmful to 

consumers and honest businesses. 

Nevertheless, the Commission has 

decided, in its discretion, to focus this 

final rule on the industries in which the 

Commission first evaluated drip 

pricing—live-event ticketing and shortterm lodging—and have a long history 

of harming consumers and honest 

competitors. 

The Commission notes that the harms 

of bait-and-switch pricing and the 

misrepresentation of fees and charges 

are particularly pronounced in 

industries such as these, in which most 

transactions occur online. Consumers 

trying to comparison shop across 

multiple websites, or even on the same 

website, when deciding what tickets to 

purchase or where to travel are unable 

to do so effectively because some 

businesses hide the true total price and 

instead force consumers to go to 

different sites and click through 

multiple web pages for each offer to 

learn the true total price. 

Consumer harm is also pronounced in 

these industries because the offered 

goods and services are often identical 

(as is the case with live-event tickets), 

or nearly identical (as is the case with 

competing short-term lodging offers in a 

particular destination and for a 

particular star rating), and the most 

salient feature is the total price, which 

is shrouded from consumers. Indeed, for 

some consumers, hotel rooms are 

interchangeable so long as the location, 

star rating, and reviews are similar 


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59 15 U.S.C. 57a(b)(3). 

60NPRM, 88 FR 77435; see also, e.g., FTC–2022– 

0069–6099 (ANPR) (Consumer Reports discussed its 

WTFee?! Survey, 2018 Nationally-Representative 

Multi-Mode Survey of hidden fees in multiple 

sectors of the economy and the prevalence of unfair 

or deceptive fees practices.); FTC–2022–0069–6095 

(ANPR) (Consumer Federation of America noted 

that the Washington Attorney General’s Hidden Fee 

Survey showed that consumers experienced 

unexpected fees in a wide range of industries.); 

FTC–2022–0069–6113 (ANPR) (UnidosUS cited 

surveys or studies by itself, the Financial Health 

Network, and the Center for Responsible Lending 

that documented the impact of fees related to 

financial services products.). 

61See, e.g., Complaint ¶¶ 4–5, 106–14, FTC v. 

Invitation Homes, Inc., No. 24–cv–04280 (N.D. Ga. 

Sept. 24, 2024) (alleging that defendant, among 

other deceptive and unfair practices, deceptively 

advertised monthly home rental prices that omitted 

and used confusing and buried language about 

mandatory fees); Complaint ¶¶ 39–46, FTC v. 

Vonage Holdings Corp., No. 3:22–cv–6435 (D.N.J. 

Nov. 3, 2022) (alleging in part that defendant 

charged undisclosed large cancellation fees); 

Complaint ¶¶ 42–44, 50, United States v. Funeral 

Cremation Grp. of N. Am., LLC (‘‘Legacy Cremation 

Servs.’’), No. 0:22–cv–60779 (S.D. Fla. Apr. 22, 

2022) (alleging defendants advertised artificially 

low prices for cremation services which ultimately 

included undisclosed additional charges and, in 

some cases where consumers contested these 

charges, defendants refused to return remains); 

Complaint ¶ 9, FTC v. Liberty Chevrolet, Inc. 

(‘‘Bronx Honda’’), No. 1:20–cv–03945 (S.D.N.Y. 

May 21, 2020) (alleging defendants advertised low 

sales prices but later told consumers they were 

required to pay additional charges including 

certification charges); Complaint ¶ 13, FTC v. 

NetSpend Corp., No. 1:16–cv–04203 (N.D. Ga. Apr. 

11, 2017) (alleging in part that defendant charged 

maintenance and usage fees to consumers who were 

unable to use all, or even a portion of, the funds 

of their prepaid debit cards); see also Complaint 

¶¶ 24–25, 29, 40–42, FTC v. AT&T Mobility LLC, 

No. 3:14–cv–04785 (N.D. Cal. Oct. 28, 2014) 

(alleging defendant did not adequately disclose the 

limitations of defendant’s data plan offerings and 

subsequently charged high cancellation fees for 

consumers who chose to end their contracts); 

Complaint ¶¶ 1, 26, 39–40, FTC v. Millennium 

Telecard, Inc., No. 2:11–cv–02479 (D.N.J. May 2, 

2011) (alleging defendants deceptively marketed 

prepaid credit calling cards by failing to adequately 

disclose fees that substantially limited the number 

of minutes consumers had purchased); Complaint 

¶ 15, FTC v. CompuCredit Corp., No. 1:08–cv– 

01976 (N.D. Ga. June 10, 2008) (alleging in part that 

defendants misrepresented the credit limits on 

various credit cards and failed to disclose fees 

charged upfront). 

62See, e.g., Complaint ¶¶ 4–5, 106–14, 118–23, 

Invitation Homes, Inc., No. 24–cv–04280 (alleging 

that defendant, among other deceptive and unfair 

practices, misled consumers about fees by using 

confusing and buried language); Complaint ¶¶ 39– 

46, Vonage Holdings Corp., No. 3:22–cv–6435; 

Complaint ¶¶ 61–63, FTC v. Benefytt Techs., Inc., 

No. 8:22–cv–1794 (M.D. Fla. Aug. 8, 2022) (alleging 

in part that defendants bundled and charged fees 

for unwanted products with sham health insurance 

plans); Complaint ¶¶ 17–20, FTC v. Passport Auto 

Grp., Inc., No. 8:22–cv–02670 (D. Md. Oct. 18, 2022) 

(alleging in part that defendants advertised vehicle 

prices that did not include redundant fees ranging 

from hundreds to thousands of dollars for 

inspection, reconditioning, preparation, and 

certification); Complaint ¶¶ 3, 33, 41, FTC v. N. Am. 

Auto. Serv., Inc. (‘‘Napleton Auto’’), No. 1:22–cv– 

01690 (E.D. Ill. Mar. 31, 2022) (alleging defendants 

charged consumers for additional products and 

services without their consent and misrepresented 

the fees as mandatory, resulting in artificially low 

advertised prices); Complaint ¶¶ 50–51, 

Amazon.com, Inc. (‘‘Amazon Flex’’), No. C–4746 

(FTC June 9, 2021) (alleging respondents falsely 

represented that 100% of tips would go to the 

driver in addition to the pay respondents offered 

drivers); Complaint ¶¶ 37–39, FTC v. Lead Express, 

Inc., No. 2:20–cv–00840 (D. Nev. May 11, 2020) 

(alleging in part that defendants did not clearly and 

conspicuously disclose material information related 

to the total amount of payments related to loans and 

also withdrew significantly more than the stated 

total cost of the loan from consumers’ accounts); 

Complaint ¶¶ 9–10, FTC v. FleetCor Techs, Inc., No. 

1:19–cv–05727, 2019 WL 13081514 (N.D. Ga. Dec. 

20, 2019) (alleging defendants charged consumers 

arbitrary and unexpected fees related to pre-paid 

fuel cards without consumers’ consent); Complaint 

¶¶ 4, 30–32, 36–37, FTC v. BCO Consulting Servs., 

Inc., No. 8:23–cv–00699 (C.D. Cal. Apr. 24, 2023) 

(alleging defendants enticed consumers with false 

promises to alleviate student loan debt despite not 

applying any payments to the student loan balances 

and collecting illegal advance fees without 

providing any services); Complaint ¶¶ 31–36, FTC 

v. OMICS Grp. Inc., No. 2:16–cv–02022 (D. Nev. 

Aug. 25, 2016) (alleging in part defendants 

misrepresented the publishing process of academic 

papers and only disclosed large publishing fees 

after notifying consumers that their papers had been 

approved for publication); Complaint ¶¶ 12, 23–25, 

FTC v. Lending Club Corp., No. 3:18–cv–02454 

(N.D. Cal. Apr. 25, 2018) (alleging defendant 

charged consumers an upfront fee based on a 

percentage of the loan requested that was not 

clearly and conspicuously disclosed; this hidden 

fee caused loans received to be substantially smaller 

than advertised); Complaint ¶ 37, FTC v. T-Mobile 

USA, Inc., No. 2:14–cv–00967 (W.D. Wash. July 1, 

2014) (alleging defendant added unauthorized 

third-party charges to the telephone bills of 

consumers); Amended Complaint ¶¶ 21–22, FTC v. 

Websource Media, LLC, No. 4:06–cv–01980 (S.D. 

Tex. June 21, 2006) (alleging defendants placed 

charges on consumer telephone bills despite 

representations that there would be no charges or 

across offers, and what matters most is 

the total price. 

In the future, the Commission may 

address these unfair and deceptive 

practices across industries as discussed 

in the NPRM. For now, however, the 

Commission will address unfair and 

deceptive pricing practices in other 

industries using its existing section 5 

authority. 

A. Prevalence of Acts or Practices 

Addressed by the Rule 

As discussed herein, and in the 

NPRM, the Commission finds that 

unfair or deceptive pricing practices 

involving bait-and-switch pricing and 

misleading fees or charges are prevalent 

throughout the economy and affect, or 

have the potential to affect, virtually 

every purchasing transaction a 

consumer undertakes, including 

decisions about basic goods or services; 

where to live, dine, stay, or travel; and 

what events to attend. Specifically, the 

Commission finds that the following 

unfair or deceptive practices relating to 

fees are prevalent generally throughout 

the economy and specifically in the 

live-event ticketing and short-term 

lodging industries: (1) bait-and-switch 

pricing practices that hide the total 

price of goods or services by omitting 

mandatory fees and charges from 

advertised prices, including through 

drip pricing, and (2) misrepresenting the 

nature, purpose, amount, and 

refundability of fees or charges. 

Section 18 of the FTC Act instructs 

that the Commission may determine 

that unfair or deceptive acts or practices 

are prevalent if: ‘‘it has issued cease and 

desist orders regarding such acts or 

practices’’ or ‘‘any other information 

available to the Commission indicates a 

widespread pattern of unfair or 

deceptive acts or practices.’’ 59 In 

support of its preliminary finding that 

these practices are prevalent, the NPRM 

cited enforcement evidence, including 

prior work by the Commission, 

complementary actions by State 

Attorneys General, private lawsuits, and 

international actions to address unfair 

or deceptive pricing practices, as well as 

comments received in response to the 

ANPR.60 The NPRM also described 

legislative and regulatory action taken 

by multiple States to address unfair or 

deceptive fees. 

To support its prevalence 

determination herein as to the economy 

generally, and as to the live-event 

ticketing and short-term lodging 

industries specifically, the Commission 

reiterates that it has a long history of 

enforcement actions, as well as a 

plethora of other information, indicating 

a widespread pattern of bait-and-switch 

pricing practices, including drip pricing 

and misleading fees or charges. In 

addition, the Commission’s prevalence 

determination is further supported by 

the Commission’s workshops and 

warning letters relating to bait-andswitch pricing and misleading fees or 

charges; the behavioral and economic 

research documenting consumer harm 

from these practices; and consumer 

surveys and reports. The Commission 

also relies on the great majority of the 

more than 60,800 comments filed in 

response to the NPRM—one of the 

largest number of comments filed in any 

Commission rulemaking to date— 

including comments by consumers, 

consumer groups, academics, 

businesses, and government officials 

highlighting the prevalence of these 

unfair and deceptive practices and 

urging the Commission to promulgate a 

final rule to combat them. 

As explained in the NPRM, the 

Commission has a long history of 

enforcement actions targeting unfair and 

deceptive bait-and-switch pricing tactics 

concerning hidden fees 61 and 

misrepresentations regarding the nature 

and purpose of fees.62 The takeaway 


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obligations); FTC v. Mercury Mktg. of Del., Inc., No. 

00–cv–3281, 2004 WL 2677177, *1 (E.D. Pa. Nov. 

22, 2004) (finding defendants billed consumers 

without their consent after misleading consumers 

about introductory internet packages); Complaint 

¶¶ 25–27, FTC v. Stewart Fin. Co., No. 1:03–cv– 

02648 (N.D. Ga. Sept. 4, 2003) (alleging in part that 

defendants package undisclosed add-on products 

with consumer loans and in some cases describe 

those add-on products as mandatory); Complaint 

¶¶ 19–21, 24, FTC v. Hold Billing Serv., Ltd., No. 

SA–98–CA–0629–FB (W.D. Tex. July 16, 1998) 

(alleging defendants had previously added thirdparty charges to consumers’ phone bills without 

permission by using sweepstakes entry forms as 

contracts to authorize charges); Complaint ¶¶ 18, 

33, 56–58, FTC v. Lake, No. 8:15–cv–00585–CJC– 

JPR (C.D. Cal. Apr. 14, 2015) (alleging defendants 

misrepresented that trial loan payments or 

reinstatement fee payments would be held in 

escrow and refunded to the consumer if the loan 

modification was not approved); FTC v. Hope for 

Car Owners, LLC, No. 2:12–CV–778–GEB–EFB, 

2013 WL 322895, at *3–4 (E.D. Cal. Jan. 24, 2013) 

(finding that the FTC sufficiently stated a claim for 

misrepresentation of the refundability of vehicle 

loan modification fees and entering default 

judgment); Amended Complaint ¶¶ 38–39, 58–60, 

FTC v. U.S. Mortg. Funding, Inc., No. 9:11–cv– 

80155–JIC (S.D. Fla. July 26, 2011) (alleging 

defendants misrepresented that an upfront loan 

modification fee was refundable); FTC v. Nat’l Bus. 

Consultants, Inc., 781 F. Supp. 1136, 1143 (E.D. La. 

1991) (finding that ‘‘defendants’ misrepresentations 

regarding the ease with which the ‘performance 

deposit’ could be refunded composed a large part 

of the various and sundry misrepresentations’’). 

63Compare 15 U.S.C. 45(m) (excluding consent 

orders from the type of cease and desist orders that 

could support an action for civil penalties under 15 

U.S.C. 45(m)(1)(B)) and 108 Stat. 1691 (1994) 

(amending 15 U.S.C. 45(m) to add ‘‘other than a 

consent order’’ after the term ‘‘cease and desist 

order’’) with 15 U.S.C. 57a(b)(3) (stating that the 

Commission may make a determination of 

prevalence if ‘‘it has issued cease and desist orders 

regarding such acts or practices or any other 

information available to the Commission 

indicat[ing] a widespread pattern of unfair or 

deceptive acts or practices’’). Even if consent orders 

and the investigations that lead up to them are not 

‘‘cease and desist orders,’’ in making a 

determination of prevalence, the Commission can 

still rely upon them as ‘‘other information.’’ 

64Fed. Trade Comm’n, The Economics of Drip 

Pricing (May 21, 2012), https://www.ftc.gov/newsevents/events/2012/05/economics-drip-pricing. 

65See, e.g., Fed. Trade Comm’n, The Economics 

of Drip Pricing: Conference Transcript 76–111 (May 

21, 2012), https://www.ftc.gov/sites/default/files/ 

documents/public_events/economics-drip-pricing/ 

transcript.pdf. 

66Press Release, Fed. Trade Comm’n, FTC Warns 

Hotel Operators that Price Quotes that Exclude 

‘‘Resort Fees’’ and Other Mandatory Surcharges 

May Be Deceptive (Nov. 28, 2012), https://

www.ftc.gov/news-events/news/press-releases/2012/ 

11/ftc-warns-hotel-operators-price-quotes-excluderesort-fees-other-mandatory-surcharges-may-be. 

67Mary Sullivan, Fed. Trade Comm’n, Economic 

Analysis of Hotel Resort Fees 4 (2017), https://

www.ftc.gov/system/files/documents/reports/ 

economic-analysis-hotel-resort-fees/p115503_hotel_

resort_fees_economic_issues_paper.pdf. 

68 Id. 

69 Id. 

70 Id. 

71 Id. 

72Fed. Trade Comm’n, ‘‘That’s the Ticket’’ 

Workshop: Staff Perspective 4 (May 2020), https:// 

www.ftc.gov/system/files/documents/reports/thatsticket-workshop-staff-perspective/staffperspective_

tickets_final-508.pdf. 

73 Id. 

74 Id. 

from this enforcement history is clear— 

businesses cannot hide or misrepresent 

the true cost of a good or service or 

mislead consumers about the nature, 

purpose, amount, or refundability of 

fees or charges. Some commenters 

suggested consent orders are not ceaseand-desist orders that the Commission 

can rely upon to support a finding of 

prevalence, but that is incorrect. The 

FTC Act makes clear when it intends to 

exclude consent orders from the ambit 

of ‘‘cease and desist orders,’’ and does 

not do so in section 18.63

In addition to the Commission’s 

enforcement actions, for more than a 

decade, the Commission has engaged 

with the public and issued guidance to 

industry on issues related to bait-andswitch tactics, including drip pricing, 

and the misrepresentation of fees or 

charges. The Commission first engaged 

with the public on the concept of drip 

pricing in 2012 by convening a 

conference, titled ‘‘The Economics of 

Drip Pricing,’’ to bring together 

economists and marketing academics to 

‘‘examine the theoretical motivation for 

drip pricing and its impact on 

consumers, empirical studies, and 

policy issues pertaining to drip 

pricing.’’ 64 Several psychological 

theories were discussed at this 

conference, and these theories explain 

why consumers cannot reasonably avoid 

making errors when the total price is not 

revealed upfront.65 Following the 

workshop, Commission staff sent 

warning letters to hotels and online 

travel agents that were not adequately 

disclosing resort fees or including those 

fees in the total price.66 These hotels 

and online travel agents were employing 

drip pricing tactics as well as another 

bait-and-switch pricing tactic, 

partitioned pricing, to inadequately 

disclose resort fees and hide the total 

price of a hotel stay. Partitioned pricing 

consists of dividing a price into 

multiple components without ever 

disclosing the total and leaving 

consumers to figure out the true total 

price on their own. Hotels, for example, 

might separately list the room rate and 

‘‘resort fee’’ but never add them up and 

quote an all-inclusive total price. In 

2017, the Commission’s Bureau of 

Economics published a report that 

reviewed the existing literature on drip 

pricing and partitioned pricing and 

examined the costs and benefits of 

disclosing hotel resort fees.67 The report 

found that ‘‘[u]nless the total price is 

disclosed up front, separating resort fees 

from the room rate is unlikely to result 

in benefits that offset the likely harm to 

consumers.’’ 68 Specifically, 

separating mandatory resort fees from posted 

room rates without first disclosing the total 

price is likely to harm consumers by 

increasing the search costs and cognitive 

costs of finding and choosing hotel 

accommodations. Forcing consumers to click 

through additional web pages to see a hotel’s 

resort fee increases the cost of learning the 

hotel’s price. Separating the room rate from 

the resort fee increases the cognitive costs of 

remembering the hotel’s price. When it 

becomes more costly to search and evaluate 

an additional hotel, a consumer’s choice is 

either to incur higher total search and 

cognitive costs or to make an incomplete, less 

informed decision that may result in a more 

costly room, or both.69

The report observed that hotels could 

eliminate these costs to consumers by 

including the resort fee in the advertised 

price; bundling the same resort services 

with the room and charging the same 

total price; listing the components of the 

total price separately, as long as the total 

price is the most prominently disclosed 

price; or changing to unbundled, 

optional resort services which would 

not be included in the advertised 

price.70 Finally, the report did not find 

‘‘any benefits to consumers from 

separately-disclosed mandatory resort 

fees that could not be achieved by first 

listing the total price and then 

disclosing the resort fee.’’ 71

In 2019, the Commission hosted a 

workshop and issued a staff perspective 

report that examined pricing and fees in 

the live-event tickets market.72 The 

report observed, 

On most primary and resale 

platforms, the ticket price a consumer 

first sees is not what the consumer will 

pay. Mandatory fees, such as ‘venue’ 

and ‘ticket processing’ fees, bulk up the 

price–often by as much as thirty percent 

. . . . The late disclosure of fees 

increases search costs for consumers 

and makes it harder to comparison 

shop.73

The report remarked that ‘‘[a]ll of the 

workshop panelists who discussed the 

fees issue, including each participating 

ticket seller that does not currently 

provide upfront all-in pricing, favored 

requiring all-in pricing through federal 

legislation or rulemaking.’’ 74

The Commission’s finding of 

prevalence is further supported by the 

complementary enforcement actions 

brought by its law enforcement partners, 

most of which have resulted in orders 

prohibiting bait-and-switch pricing and 

misrepresenting fees and charges in the 

short-term lodging, live-event ticketing, 

delivery services, rental cars, travel, and 

tax filing preparation services 


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75See, e.g., Complaint ¶ 3, Rhode Island v. UPP 

Global, LLC, No. PC–2024–04453 (R.I. Super. Ct. 

Aug. 13, 2024) (alleging in part that defendant 

charges a fee as a tax, fails to disclose prices until 

after consumers have elected to use defendant’s 

service, and advertises hourly prices and then 

requires consumers to pay for multiple hours at a 

minimum); Complaint ¶¶ 3–4, District of Columbia 

v. StubHub, Inc., No. 2024–CAB–004794 (D.C. 

Super. Ct. July 31, 2024) (alleging defendant uses 

drip pricing and entices consumers to shop for 

tickets by displaying artificially low prices and 

revealing mandatory fees later in the checkout 

process which defendant also misrepresents the 

purpose of); Consent Decree ¶¶ 10–24, Arizona v. 

Cox Enterprises, Inc., No. CV–2023–019752 (Ariz. 

Sup. Ct. Jan. 2, 2024) (alleging defendants failed to 

disclose additional fees to consumers who 

purchased services through long-term contracts 

based on ‘‘price-lock’’ guarantee); Assurance of 

Voluntary Compliance ¶ 2, Texas v. Marriott Int’l, 

Inc., No. 2023–CI09717 (Tex. Dist. Ct. May 16, 

2023) (alleging defendant misrepresented various 

fees, including resort fees, and did not include all 

mandatory fees in the advertised room rate in 

violation of the Texas Deceptive Trade Practices 

Act); Plaintiff’s Original Pet. ¶ 1, Texas v. Hyatt 

Hotels Corp., No. C2023–0884D (TX. Dist. Ct. May 

15, 2023) (alleging defendant did not include 

mandatory fees in advertised room rates in violation 

of the Texas Deceptive Trade Practices Act); 

Consent Order ¶ 20, District of Columbia v. 

Grubhub Holdings, Inc., No. 2022 CA 001199 B 

(D.C. Super. Ct. Jan. 4, 2023) (alleging in part that 

defendants misrepresented menu prices to 

consumers and deceptively advertised that 

consumers could ‘‘order online for free’’); 

Assurance of Voluntary Compliance ¶ 4, 

Commonwealth v. Omni Hotels Mgmt., GD–23– 

013056 (Pa. Commw. Ct. Nov. 9, 2023) (alleging 

defendants failed to advertise room prices including 

mandatory fees, misleading consumers); Assurance 

of Voluntary Compliance ¶ 2, Commonwealth v. 

Choice Hotels Intl., Inc., GD–23–011023 (Pa. 

Commw. Ct. Sept. 21, 2023) (alleging defendants 

failed to advertise room prices including mandatory 

fees misleading consumers); Assurance of 

Voluntary Compliance ¶¶ 1–5, Commonwealth v. 

RYADD, Inc., No. 2022–07262 (Pa. Commw. Ct. 

Sept. 8, 2022) (alleging defendants failed to 

advertise ticket prices including service fees and 

failed to clearly disclose an itemization of the total 

cost); Complaint ¶ 1, Commonwealth v. Mariner 

Finance, LLC, No. 2:22–cv–03235–MAK (E.D. Pa. 

Sept. 6, 2022) (alleging defendant charged 

consumers for hidden add-on products without 

consumer knowledge and in some cases after 

explicit rejection); Consent Order ¶ 6, District of 

Columbia v. Maplebear, Inc., No. 2020 CA 003777B 

(D.C. Super. Ct. Aug. 19, 2022) (prohibiting 

defendant from misrepresenting the nature and 

purpose of fees applied to consumers’ orders); 

Assurance of Voluntary Compliance ¶ 2, 

Commonwealth v. Marriott Int’l, Inc., No. GD–21– 

014016 (Pa. Ct. C.P. Nov. 16, 2021) (alleging 

defendant misrepresented its room rates by failing 

to include items such as mandatory fees in its 

pricing); Consent Order ¶ 3.1–3.18, Drivo LLC, N.J. 

Div. Consumer Aff. (Sept. 16, 2020) (prohibiting 

unfair and deceptive practices relating to damage 

fees and third party reservation fees for rental 

vehicles); Press Release, Off. Minn. Att’y Gen., 

Attorney General Ellison Obtains Relief for More 

than 30,000 Comcast/Xfinity Customers (Jan. 15, 

2020) (alleging in part that defendants 

misrepresented prices for their services and added 

services without consumer consent), https://

www.ag.state.mn.us/Office/Communications/2020/ 

01/15_ComcastXfinity.asp; Press Release, Off. 

Minn. Att’y Gen., Attorney General Ellison Obtains 

Nearly $9 Million Settlement with CenturyLink for 

Overcharging Minnesota Customers (Jan. 8, 2020) 

(alleging defendant misrepresented the price of its 

services and used a complex pricing scheme to 

mislead consumers), https://www.ag.state.mn.us/ 

Office/Communications/2020/01/08_

CenturyLinkSettlement.asp.; Assurance of 

Voluntary Compliance ¶¶ 1–12, Commonwealth v. 

Event Ticket Sales, LLC, No. 201101873 (Pa. 

Commw. Ct. Nov. 19, 2020) (alleging defendants 

failed to advertise ticket prices including service 

fees and failed to clearly disclose an itemization of 

the total cost); Assurance of Voluntary Compliance 

¶ 7, CenturyLink, Inc., No. 19–CV–56401 (Or. Cir. 

Ct., 2019) (alleging defendants charged undisclosed 

fees and failing to disclose all mandatory fees and 

charges); Agreed Final J. ¶ 8, Texas v. Guided 

Tourist, LLC, No. D–1–GN–19–001618 (Tex. Dist. 

Ct. Mar. 26, 2019) (enjoining defendant from 

advertising ticket prices other than the total ticket 

price, including all mandatory fees); Settlement 

Agreement ¶ 8(b)–(c), Florida v. Dollar Thrifty Auto. 

Grp., Inc., No. 16–2018–cv–005938 (Fla. Cir. Ct., 

Jan. 14, 2019) (alleging in part that defendant 

misrepresented optional charges as mandatory and 

did not sufficiently disclose toll-related fees). 

Additionally, Intuit recently entered a multistate 

settlement of allegations that it misrepresented its 

tax filing products would come at no cost. 

Assurance of Voluntary Compliance, 

Commonwealth v. Intuit Inc., No. 220500324 (Pa. 

Ct. C.P. May 4, 2022). 

76FTC–2023–0064–3215 (Attorneys General of 

the States of North Carolina and Pennsylvania, 

along with Attorneys General of the States or 

Territories of Arizona, Colorado, Connecticut, 

Delaware, District of Columbia, Hawaii, Illinois, 

Maine, Michigan, Minnesota, New Jersey, New 

York, Oklahoma, Oregon, Vermont, Washington, 

and Wisconsin). The Attorneys General also 

pointed to prevalence of these practices in 

residential leasing, payday lending, internet 

applications, online shopping, automobile rentals, 

carpet cleaners, dietary supplement sellers, moving 

companies, gyms, travel companies, outlet stores, 

and online auctions. 

77 Id. (The Attorneys General highlighted actions 

each has taken in their own states to address 

financial services fees, hotel fees, live-event ticket 

fees, rental housing fees, auto rental fees, and 

telecommunication fees.) 

78 Id. 

79 Id. 

80N.Y. Arts & Cult. Aff. Law sec. 25.01–25.33 

(McKinney 2023) (Effective Jun. 30, 2022) (requiring 

that the sellers and resellers of live-event tickets 

disclose the total cost of a ticket, upfront, and 

clearly and conspicuously disclose the amount of 

the price that is made up of fees and other charges); 

An Act Ensuring Transparent Ticket Pricing, H. 

259, 193rd Gen. Court (Mass. 2023) (proposed 

legislation requiring in part that the sellers and 

resellers of live-event tickets disclose the total cost 

inclusive of all ancillary fees that must be paid and 

the portion of the ticket price that represents a 

service charge or any other fee or surcharge); H.B. 

714 (2023–2024 Session) (N.C. 2023) (proposed 

legislation that requires, among other things, that 

providers of short-term lodging and live-event 

ticketing clearly display the total price of goods and 

services inclusive of mandatory fees a consumer 

would incur during a transaction); see also 2023 

Minn. H.B. 3438 (Enacted May 20, 2024) (stating 

that it is a deceptive trade practice for a business 

to not include all mandatory fees or surcharges 

when advertising, displaying or offering a price for 

goods or services); Cal. S.B. 478 (2023–2024 Regular 

Session) (Enacted Oct. 7, 2023) (amending the 

California Consumer Legal Remedies Act to state 

that it is unlawful to advertise, display, or offer a 

price for a good or service that does not include all 

mandatory fees or charges other than taxes or fees 

imposed by a government on the transaction); Cal. 

S.B. 1524 (2023–2024 Regular Session) (clarifying 

and amending S.B. 478 to include that additional 

fees such as service charges for food services 

businesses including bars and restaurants could 

appear separately so long as they were displayed on 

the menu); H.B. 636 (2023–2024) (Pa. 2023) 

(Engrossed Oct. 19, 2023) (proposed legislation 

amending the Pennsylvania Unfair Trade Practices 

and Consumer Protection Law to require the 

disclosure of all mandatory fees and charges 

included in the advertised and displayed price of 

any good or service); Conn. Gen. Stat. sec. 53–289a 

(2023) (requiring conspicuous disclosure in the 

advertisement of total price of live-event tickets 

including service charges); Conn. Gen. Stat. sec. 53– 

289a (2023) (requiring conspicuous disclosure in 

the advertisement of total price of live-event tickets 

including service charges); SB 329 (2024 Reg. Sess.) 

(Md.) (requiring all-in pricing throughout the 

purchase process of a live-event ticket); SB 329 

(2024 Reg. Sess.) (Md.) (requiring all-in pricing 

throughout the purchase process of a live-event 

ticket); 1510 Mass. Reg. 5 (Dec. 8, 2023) (Proposed 

Regulations 940 C.M.R. 38.00: Unfair and Deceptive 

Fees) (proposed regulation stating that it is an 

unfair and deceptive practice to misrepresent or fail 

to disclose at the time of initial presentation of the 

price of any product the total price of that product 

inclusive of all fees, interest, charges, or other 

expenses necessary or required in order to complete 

the transaction). 81FTC–2023–0064–3271 (U.S. Senate, Sen. Amy 

Klobuchar). 

industries.75 Indeed, a group of State Attorneys General wrote in support of a 

finding of prevalence of these practices 

across industries, including event ticket 

sellers, and hotels and other short-term 

lodging providers.76 They have 

attempted to address some, but not all, 

of these fees in their own States.77 The 

State Attorneys General cited a number 

of cases across industries demonstrating 

that bait-and-switch pricing and 

misleading fees are ‘‘a chronic, prolific 

problem confronting many consumers 

across numerous sectors of the 

economy.’’ 78 Further, they agreed with 

the Commission’s assertion that 

‘‘charges that misrepresent their nature 

and purpose are unfair and deceptive 

because they mislead consumers and 

make it more difficult for truthful 

businesses to compete on price.’’ 79 The 

Commission takes note of legislative 

and regulatory efforts in Minnesota, 

California, Pennsylvania, New York, 

Massachusetts, and North Carolina to 

combat hidden and misleading fees 80

which further support its finding of 

prevalence. 

Comments submitted by Federal and 

State elected officials echoing the 

widespread practice of misleading 

consumers about total prices and fees or 

charges further strengthen the 

Commission’s prevalence finding. For 

example, U.S. Senator Amy Klobuchar 

stated that she held a hearing focusing 

on the lack of transparency in the liveevent ticketing industry as well as a 

hearing on fees in the rental housing 

market that prevent renters from having 

meaningful opportunities to compare 

prices.81 U.S. Senator Robert Casey 

discussed a report released on January 

24, 2024, ‘‘Additional Charges May 

Apply: How Big Corporations Use 


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82FTC–2023–0064–3135 (U.S. Senate, Sen. 

Robert P. Casey, Jr. noted that his report ‘‘details 

how corporations use hidden fees to deceive 

consumers and increase corporate profits, which 

leaves families paying more than they should and 

puts honest businesses at a disadvantage.’’) The 

report is available at https://www.casey.senate.gov/ 

imo/media/doc/greedflation_junk_fees3.pdf. 

83FTC–2023–0064–2858 (U.S. House of 

Representatives, Rep. Maxwell Alejandro Frost, 

Rep. Jimmy Gomez, Rep. Barbara Lee, Rep. Rashida 

Tlaib, Rep. Kevin Mullin, Rep. Dwight Evans, Rep. 

Judy Chu, Rep. Greg Casar, Rep. Dan Goldman, and 

Rep. Salud Carbajal stated that the rule would help 

eliminate some of the barriers to those seeking 

rental housing as renters ‘‘often face ambiguous or 

misleading fees’’ and ‘‘bring much needed 

transparency to the rental housing market.’’). 

84FTC–2023–0064–2341 (Massachusetts House of 

Representatives, Rep. Lindsay Sabadosa); FTC– 

2023–0064–1411 (Arizona House of 

Representatives, Rep. Analise Ortiz); FTC–2023– 

0064–3072 (Michigan Senate and House of 

Representatives, Sen. Darrin Camilleri, Sen. Mary 

Cavanagh, and Rep. Betsy Coffia); FTC–2023–0064– 

3079 (Montana State Senate, Senate Democratic 

Caucus, Sen. Pat Flowers, Sen. Susan Webber, Sen. 

Andrea Olsen, Sen. Edie McClafferty, Sen. Jen 

Gross, Sen. Janet Ellis, Sen. Shane Morigeau, Sen. 

Ellie Boldman, Sen. Ryan Lynch, Sen. Christopher 

Pope, Sen. Mike Fox, Sen. Denise Hayman, Sen. 

Willis Curdy, and Sen. Mary Ann Dunwell); FTC– 

2023–0064–3103 (Florida House of Representatives, 

Rep. Angela Nixon); FTC–2023–0064–3123 

(Syracuse, New York, City Auditor Alexander 

Marion); FTC–2023–0064–3117 (Maryland House of 

Delegates, Del. Julie Palakovich Carr); FTC–2023– 

0064–3149 (North Carolina House of 

Representatives, Rep. Julie von Haefen); FTC–2023– 

0064–3237 (North Carolina House of 

Representatives, Rep. Pricey Harrison). 

85See, e.g., Transparency In Charges for Key 

Events Ticketing Act (‘‘TICKET Act’’), H.R. 3950, 

sec. 2, 118th Cong. (as engrossed in the House, May 

15, 2024) (among other provisions, requiring ticket 

sellers, including secondary markets and 

exchanges, to clearly and conspicuously disclose 

the total ticket price for an event in any 

advertisement and each time the ticket is displayed 

in the purchasing process, and to provide an 

itemized list of the base ticket price and each fee 

or charge prior to completion of the purchase; 

violations of the TICKET Act would be treated as 

violation of a rule defining an unfair or deceptive 

act or practice under section 18(a)(1)(B) of the FTC 

Act); No Hidden Fees on Extra Expenses for Stays 

Act of 2023 (‘‘No Hidden FEES Act of 2023’’), H.R. 

6543, sec. 2(a), 118th Cong. (as engrossed in the 

House, June 11, 2024) (among other provisions, 

prohibiting providers of short-term lodging, 

including providers of a website or other 

centralized platform that advertises or otherwise 

offers the price of a reservation for short-term 

lodging, from advertising, displaying, marketing, or 

otherwise offering for sale, including through a 

direct offering, third-party distribution, or 

metasearch referral, a price of a reservation that 

does not include each mandatory fee; violations of 

sec. 2(a) would be treated as violation of a rule 

defining an unfair or deceptive act or practice under 

section 18(a)(1)(B) of the FTC Act). 

86Competition Act, R.S.C., 1985, c. C–34, 

¶ 74.01(1.1) (Can.) (providing with respect to ‘‘drip 

pricing’’ that ‘‘the making of a representation of a 

price that is not attainable due to fixed obligatory 

charges or fees constitutes a false or misleading 

representation’’), https://laws.justice.gc.ca/eng/acts/ 

C-34/FullText.html. 

87Competition and Consumer Act 2010, Vol. 4, 

Sched. 2, Ch. 3, P. 3–1, Sec. 48, Ch. 4, P. 4–1, Sec. 

166 (Austl.) (prohibiting ‘‘mak[ing] a representation 

with respect to an amount that, if paid, would 

constitute a part of the consideration for the supply 

of the goods or services unless the person also 

specifies, in a prominent way and as a single figure, 

the single price for the goods or services’’), https:// 

www.legislation.gov.au/C2004A00109/latest/text. 

88 Directive 2005/29/EC of the European 

Parliament and of the Council of 11 May 2005 

concerning unfair business-to-consumer 

commercial practices in the internal market, art. 7, 

2005 O.J. (L 149) (providing that it is a misleading 

commercial practice to engage in ‘‘bait advertising’’ 

or offering products at a specified price if not able 

to provide the products at that price for a period 

and in quantities reasonable with regard to the 

product, the scale of advertising of the product and 

the price offered), https://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=celex%3A32005L0029; see 

also Directive 2011/83/EU of the European 

Parliament and of the Council of 25 October 2011 

on consumer rights, art. 5 and art. 6, 2011 O.J. (L 

304), https://eur-lex.europa.eu/legal-content/EN/ 

TXT/?uri=CELEX%3A32011L0083&

qid=1726109600968. Additionally, a 1998 Directive 

required that the selling price should be indicated 

for all products referred to in the Article, which 

means a price that is the final price for a unit of 

the product including VAT and all other taxes. See 

Directive 98/6/EC of the European Parliament and 

of the Council of 16 February 1998 on consumer 

protection in the indication of the prices of 

products offered to consumers, 1998 O.J. (L 80), 

https://eur-lex.europa.eu/legal-content/EN/TXT/ 

?uri=CELEX%3A31998L0006&qid=1726109951386. 

89 Digital Markets, Competition and Consumers 

Act 2024, c. 13, sec. 230 (providing that an 

invitation to purchase omits material information if 

it omits the total price of the product or, if the 

nature of the product prevents all or a part of the 

total price from reasonably being calculated in 

advance, how the price (or that part of it) will be 

calculated), https://www.legislation.gov.uk/ukpga/ 

2024/13/section/230. Reports preceding this 

legislation included: UK Department for Business & 

Trade, Estimating the Prevalence and Impact of 

Online Drip Pricing (2023), https://assets.

publishing.service.gov.uk/media/64f1ebd7a78c5

f000dc6f448/estimating-the-prevalence-and-impactof-online-drip-pricing.pdf; and UK Department for 

Business & Trade, Government response to 

consultation on ‘‘Smarter Regulation: Consultation 

on Improving Price Transparency and Product 

Information for Consumers’’ (2023), https://

www.gov.uk/government/consultations/smarterregulation-improving-price-transparency-andproduct-information-for-consumers/outcome/ 

government-response-to-consultation-on-smarterregulation-improving-consumer-price-transparencyand-product-information-forconsumers#introduction. 

90See, e.g., Class Action Complaint ¶¶ 2–3, 

Abdelsayed v. Marriot Int’l, Inc., No. 3:21–cv– 

00402–JLS–AHG (S.D. Cal. Mar. 5, 2021) (alleging 

defendant misled consumers into believing that 

hotel rooms were cheaper that they actually were 

by engaging in drip pricing that baited consumers 

with lower prices and adding charges, such as 

resort fees, amenity fees, and destination fees, 

throughout the vending process); Complaint ¶¶ 1, 

3–5, Travelers United v. MGM Resorts Int’l, Inc., No. 

2021–CA–00477–B (D.C. Super. Ct. Feb. 18, 2021) 

(alleging defendant misled consumers into 

believing hotel rooms were cheaper that they 

actually were by using drip pricing that hid resort 

fees from advertised daily room rates); Class Action 

Complaint ¶¶ 18, 31, 43, 69–71, Lee v. Ticketmaster 

LLC, No. 3:18–cv–05987–VC (N.D. Cal. Sept. 28, 

2018) (alleging, in part, that defendants were 

unjustly enriched through service charges added to 

resale tickets); Second Amended Class Action 

Complaint ¶¶ 1–2, Wang v. StubHub, Inc., No. 

CGC–18564120 (Cal. Super. Ct. Feb. 25, 2019) 

(alleging defendant intentionally hid additional fees 

in order to advertise artificially low-ticket prices); 

Class Action Complaint ¶¶ 1–3, 33–34, Holl v. 

United Parcel Service, Inc., No. 4:16–cv–05856– 

HSG (N.D. Cal., Oct. 11, 2016) (alleging defendant 

created a bait and switch by falsely advertising low 

published rates that were later inflated); (Truth in 

Advertising, Inc., submitted information about its 

tracking of class action cases related to unfair and 

deceptive fees, including cases involving event 

ticket sellers charging and misrepresenting the 

purpose of ‘‘junk fees’’ and hotels advertising a low 

base rate for rooms and then charging consumers 

more than the advertised rate by imposing 

additional fees.); see also Second Amended Class 

Action Complaint ¶¶ 5–7, Hecox v. DoorDash, Inc., 

No. 1:23–cv–01006–JRR (D. Md. Sept. 5, 2023) 

(alleging in part that defendant employed 

deceptively named fees misleading consumers to 

believe the fees were for delivery personnel or for 

government imposed fees); Class Action Complaint 

¶¶ 7–16, Ramirez v. Bank of Am., N.A., No. 4:22– 

cv–00859–YGR (N.D. Cal., Feb. 10, 2022) (alleging 

misrepresentations about the refundability of fees); 

Class Action Complaint ¶¶ 27, 36, 46–51, Cross v. 

Point and Pay LLC, No. 6:16–cv–01182 (M.D. Fla., 

June 29, 2016) (alleging defendant made 

representations about its services and fees that 

contained false, misleading, and deceptive and 

unfair statements and omissions about fees for 

online payment processing services); Class Action 

Complaint ¶¶ 1–2, 9–12, DeSimone v. LOOK 

Brands, LLC, No. 23–cv–11144 (S.D.N.Y. Dec. 22, 

2023) (alleging defendant failed to disclose the total 

cost of movie ticket prices, inclusive of all fees, in 

violation of New York state law); Class Action 

Complaint ¶¶ 1–2, 9–15, Jones v. Regal Cinemas, 

Inc., No. 23–CV–11145 (S.D.N.Y. Dec. 22, 2023) 

(alleging defendant failed to disclose total cost of 

movie ticket prices, inclusive of all fees, in 

violation of New York state law); see also FTC– 

2022–0069–6042 (ANPR). 

Hidden Fees to Nickel, Dime, and 

Deceive American Families,’’ tracking 

the variety of junk fees facing 

Pennsylvania families, including in the 

short-term lodging industry.82 A group 

of Congressional representatives raised 

concerns regarding misleading fees and 

a lack of price transparency in the rental 

housing market.83 Concerns over unfair 

and deceptive pricing were also raised 

by a variety of State legislators and 

officials.84 There has also been 

significant bipartisan interest in passing 

legislation targeting fees in the liveevent ticketing and short-term lodging 

industries.85

The Commission also takes notice of 

the work of its international 

counterparts, as well as private lawsuits 

in the United States concerning unfair 

and deceptive fee practices. Regulatory 

actions in Canada, Australia, the 

European Union, and the United 

Kingdom with respect to such conduct 

include paragraph 74.01(1.1) of the 

Canadian Competition Act,86 the 

Australian Competition and Consumer 

Protection Act of 2010,87 EU Directive 

2005/29/EC of the European Parliament 

and of the Council,88 and the UK Digital 

Markets, Competition and Consumers 

Act 2024.89 In addition, private lawsuits 

filed against businesses in the live-event 

ticketing, short-term lodging, banking, 

and delivery service industries 

challenging these practices lend further 

support to the Commission’s prevalence 

determination.90


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91See, e.g., FTC–2023–0064–3216 (Demand 

Progress Education Fund noted that consumers face 

surprise or ‘‘bogus’’ fees across industries, 

including rental housing, cell phone service, 

utilities, and ticketing, and cited a Consumer 

Reports study finding that 85% of Americans have 

dealt with fees of this nature.). 

92FTC–2023–0064–3205 (Consumer Reports 

noted the prevalence of unexpected fees in live 

entertainment or sporting events, hotels, 

telecommunication services, gas or electric utilities, 

air travel, credit cards, auto loans and purchases, 

and personal banking services.). 

93FTC–2023–0064–3160 (Consumer Federation of 

America submitted the compilation as Appendix B 

to its comment.). 

94FTC–2023–0064–3104 (Truth in Advertising, 

Inc.). 

95FTC–2023–0064–3302 (Public Citizen). 

96FTC–2023–0064–2885 (AARP argued these fees 

are not well understood by potential residents and 

that renters are charged ‘‘many superfluous fees, 

including application fees, credit check fees, pet 

fees, excessive late fees, utility-related fees, mail 

sorting fees, inspection fees, convenience fees, 

common area fees, guest fees, trash fees, notice fees, 

security deposit fees, check cashing fees, cleaning 

or repair fees, and other mandatory fees for services 

that a renter does not need or want.’’). 

97See, e.g., FTC–2023–0064–3290 (U.S. Public 

Interest Research Group Education Fund 

commented that consumers have faced more unfair 

and deceptive fees as consumers ‘‘have become 

accustomed to online transactions.’’); FTC–2023– 

0064–3090 (Atlanta Legal Aid Society, Inc. noted 

the ubiquity of unfair and deceptive fees and that 

these types of fees in the rental housing context 

have been steadily rising for years.). 

98FTC–2023–0064–3106 (American Society of 

Travel Advisors stated that resort fees are disclosed 

in a highly inconsistent manner, even between 

hotels doing business under the same brand name.); 

FTC–2023–0064–3293 (Travel Technology 

Association commented that hotels have been 

known to surprise guests at check-in with these fees 

and ‘‘guests have no reasonable recourse but to pay 

them.’’); FTC–2023–0064–3077 (Far Horizons 

Travel, by its owner, a travel agent of almost 40 

years, called hotel fees ‘‘out of control’’ and stated: 

‘‘I am appalled by these fees and how much they 

have risen over the years. . . . They say it’s for 

extra amenities but that is not always the case and 

more often not the case at all.’’). 

99FTC–2023–0064–3212 (TickPick, LLC); FTC– 

2023–0064–3137 (Chamber of Progress); FTC–2023– 

0064–3230 (Future of Music Coalition); FTC–2023– 

0064–3105 (Charleston Symphony). 

100FTC–2023–0064–3143 (ACA Connects— 

America’s Communication Association argued that 

the NPRM contained no meaningful discussion of 

prevalence of unfair or deceptive pricing 

disclosures with respect to communication 

services.); FTC–2023–0064–3186 (National LGBT 

Chamber of Commerce and the National Asian/ 

Pacific Islander American Chamber of Commerce & 

Entrepreneurship argued that ‘‘prepared food and 

grocery delivery applications . . . have 

demonstrated transparency and accessibility, 

providing clear explanations about fees.’’); FTC– 

2023–0064–3292 (National Association of Theatre 

Owners argued that the NPRM failed to demonstrate 

prevalence with respect to the theatre industry, 

identifying only fifty comments received in 

response to the ANPR that reference movie theatre 

convenience fees.); FTC–2023–0064–3238 (Gibson, 

Dunn & Crutcher LLP argued that the Commission 

has failed to reliably demonstrate the prevalence of 

unfair or deceptive fees across any industry or 

sector.); FTC–2023–0064–3233 (NCTA—The 

Internet & Television Association argued that the 

only mention of telecommunication fees is 

anecdotal, and the Commission has failed to show 

prevalence with respect to any NCTA member.); 

FTC–2023–0064–3263 (Flex Association stated that 

‘‘[t]he Commission has not pointed to evidence of 

any prevalent consumer harm that justifies 

imposing new pricing and disclosure rules on appbased delivery platforms.’’); FTC–2023–0064–3130 

(International Cemetery, Cremation & Funeral 

Association argued that over the last several 

reviews of the Funeral Rule the Commission has not 

found evidence of widespread consumer abuse 

among cemeteries or third-party suppliers.). 

101FTC–2023–0064–3258 (National Taxpayers 

Union Foundation); FTC–2023–0064–3173 (Center 

for Individual Freedom argued that the Commission 

was overly reliant on lodging, ticketing, and 

restaurants in justifying an economy-wide rule.); 

FTC–2023–0064–3251 (National RV Dealers 

Association argued the proposed rule ‘‘is an 

overextension from this drip pricing concern, and 

not only strays from the FTC’s traditional areas of 

concern but also risks impeding the normal 

business operations and innovation across a 

multitude of sectors.’’). 

102Pa. Funeral Dirs. Ass’n. v. FTC, 41 F.3d 81, 87 

(3d Cir. 1994). 

The Commission takes notice of 

additional indications of prevalence 

identified in response to the NPRM. 

Commenters to the NPRM noted that 

unfair or deceptive pricing practices 

exist economy-wide.91 For instance, 

Consumer Reports conducted a 

nationally representative survey and 

found that many consumers 

experienced unexpected fees in a 

variety of industries and that more than 

two-thirds of Americans report paying 

more in hidden fees now than they did 

five years ago.92 Similarly, Consumer 

Federation of American submitted an 

extensive compilation of stories from 

consumers about their experiences with 

junk fees that recounted hidden and 

misleading fees being applied across a 

wide range of industries.93 Truth in 

Advertising, Inc. provided a sampling of 

consumer complaints it had received 

over the years and noted the 

pervasiveness of hidden and misleading 

fees in multiple industries, including 

event ticket sales, hotel and travel 

companies, short-term lodging, internet 

apps, automobile rentals, 

communication services, carpet 

cleaning, auto/truck sales, dietary 

supplement orders, food services, 

airlines, moving services, credit unions 

and banks, payday lending services, 

gym memberships, outlet stores, sports 

betting, and online auctions.94 Public 

Citizen commented about ‘‘the 

widespread use of the deceptive 

practice of charging undisclosed fees by 

major industries . . . including 

communication carriers, air carriers, 

ticket sales, auto dealers, credit card 

companies, cable giants, and property 

owners,’’ as well as ‘‘event ticketing, 

hotels, funeral homes,’’ and other 

industries.95 Additionally, AARP 

pointed to a myriad of confusing fees 

charged by assisted living facilities.96

Commenters also noted that instances of 

unfair and deceptive fees or charges 

have increased over time.97

Commenters also raised concerns 

about the prevalence of hidden fees in 

specific industries such as live-event 

ticketing and short-term lodging. The 

American Society of Travel Advisors, 

Travel Technology Association, and a 

travel agent observed that, despite 

increased scrutiny over hotel resort fees, 

there remains little uniformity in 

pricing practices, and bait-and-switch 

pricing remains an issue.98 Multiple 

commenters raised continued concerns 

over hidden fee pricing practices in the 

live-event ticketing market. TickPick, 

LLC observed the ‘‘widespread’’ 

deceptive practice of bait-and-switch 

pricing rampant in this industry. 

Chamber of Progress noted that 

deceptive and unfair fees are ‘‘rampant 

in some industries and pose clear 

threats to consumers,’’ including ‘‘hotel 

stays, live sports or concert tickets, and 

airline tickets.’’ Future of Music 

Coalition commented that they have 

worked to ‘‘deal[ ] with the scourge of 

junk fees in various parts of the 

economy,’’ including live touring. The 

Charleston Symphony affirmed that 

‘‘requiring sellers to disclose the total 

price clearly and conspicuously[ ] 

addresses a pressing issue in the 

nonprofit performing arts sector.’’ 99

Despite the overwhelming evidence 

supporting the prevalence of bait-andswitch pricing and misleading fee 

practices economy-wide, a minority of 

commenters argued that the 

Commission has failed to meet its 

burden of establishing prevalence. Some 

commenters contended that the 

Commission’s evidence focuses on a 

small number of problematic industries 

and does not demonstrate prevalence in 

every single industry across the 

economy.100 Some commenters 

similarly contended that the proposed 

rule was an attempt to impose a ‘‘onesize-fits-all’’ solution on distinct 

industries, not all of which are engaging 

in unfair or deceptive practices, and 

thus the proposed rule is overbroad and 

not supported by the requisite evidence 

of prevalence.101

First, the Commission disagrees that it 

must find that the unfair or deceptive 

act or practice is widespread within 

every individual context or industry to 

issue a rule targeting a specific practice 

across industries. To begin with, the 

Commission’s prevalence findings need 

only have ‘‘some basis or evidence’’ to 

show ‘‘the practice the FTC rule seeks 

to regulate does indeed occur.’’ 102

While many trade regulation rules 

promulgated under section 18 focus on 

a particular industry, as discussed in 


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103 16 CFR part 429; 16 CFR part 433; 16 CFR part 

424; 16 CFR part 435; 16 CFR part 425; 16 CFR part 

461; 16 CFR part 465. 

104FTC–2023–0064–3127 (U.S. Chamber of 

Commerce argued the NPRM failed to cite any cases 

holding that late in time fee disclosures are unfair 

or deceptive and the settlements described by the 

Commission only raised the failure of companies to 

disclose certain applicable fees prior to purchase or 

at all.). 

105 Id. 

106FTC–2023–0064–3152 (Building Owners & 

Managers Association et al. commented that the 

proposed rule ‘‘lacks any reasonable factual 

underpinning as applied to the rental housing 

industry because it is not based on any statistical 

data relevant to the industry,’’ but is ‘‘based solely 

upon anecdotal, conclusory, and non-representative 

justification.’’); FTC–2023–0064–3172 (New Jersey 

Apartment Association stated that the NPRM lacked 

‘‘statistical basis’’ for claims that unfair and 

deceptive fees were an issue in the rental housing 

context and that the Commission relied on 

anecdotal evidence.). 

107See, e.g., supra notes 66, 67, 72, 75, 80, 85, 

90 (detailing the Commission’s enforcement history, 

workshops, and reports, class action lawsuits, state 

and local enforcement and regulations, and other 

efforts to curb unfair or deceptive pricing practices 

in the live-event ticket and short-term lodging 

industries). The Commission also received 

thousands of comments from individual consumers 

detailing bait-and-switch pricing and deceptive fees 

in the live-event ticket and short-term lodging 

industries in response to the ANPR and the NPRM. 

See, e.g., FTC–2023–0064–0820 (Individual 

Commenter stated ‘‘I was just considering buying 

some event tickets on Vivid Seats and was shocked 

to see that they add a full 33% in bogus fees.’’); 

FTC–2023–0064–0058 (Individual Commenter 

stated: ‘‘The worst offenders are ticket sellers/ 

resellers, who advertise baseline ticket prices in 

their search engines and then include some 

unknown amount of fees when it’s time to pay.’’); 

FTC–2023–0064–0102 (Individual Commenter 

stated: ‘‘I recently went to a MLB game and the fees 

were $21 for a $75 ticket or greater than 20%. I went 

to a concert and the tickets were $55 but the fees 

brought the price to over $100. On both cases, the 

fees were not disclosed until the payment screen.’’); 

FTC–2023–0064–0145 (Individual Commenter 

described purchasing tickets to a musical: ‘‘Nearly 

20% of the total cost was for fees that were not 

disclosed until I was at the payment step ($119 

ticket + $4.55 order processing fee + $4.00 facility 

charge + $20.50 service fee). I don’t understand 

what any of those fees are actually for.’’); FTC– 

2023–0064–0040 (Individual Commenter described 

hotel resort fees as ‘‘egregious and opaque’’ and 

stated they learned of an additional $50 per night 

resort fee upon check-in: ‘‘I asked what the purpose 

of the fee was and was told by the staff person, ‘I’m 

not really sure.’ ’’); FTC–2023–0064–1462 

(Individual Commenter stated: ‘‘Recently I found an 

‘‘affordable’’ hotel in a city and booked a 4 night 

stay, but was not informed until after I checked in 

that parking cost extra each day . . . . which made 

the hotel no longer affordable for me’’); FTC–2023– 

0064–0977 (Individual Commenter described 

spending hours trying to book a hotel to face 

‘‘mandatory hotel fees for a pool, a gym and 24 hour 

security totalled $50/night’’); FTC–2023–0064–0152 

(Individual Commenter stated that fees through 

services including Airbnb and VRBO are ‘‘often 

vague and undefined’’ and described fees including 

a ‘‘host fee,’’ ‘‘booking fee,’’ ‘‘safety fee,’’ and 

‘‘resort fee’’). 

section IV.A.1, others apply to specific 

practices across industries regardless of 

product or service, such as the CoolingOff Period for Door-to-Door Sales Rule 

(the ‘‘Cooling-Off Rule’’), the Rule on 

the Preservation of Consumers’ Claims 

and Defenses (the ‘‘Holder Rule’’), the 

Rule on Retail Food Store Advertising 

and Marketing Practices (the 

‘‘Unavailability Rule’’), the mail, 

Internet, or Telephone Order 

Merchandise Rule (the ‘‘Mail Order 

Rule’’), the Rule on the Use of 

Prenotification Negative Option Plans 

(the ‘‘Negative Option Rule’’), the Rule 

on Impersonation of Government and 

Businesses (the ‘‘Impersonator Rule’’), 

and the Rule on the Use of Consumer 

Reviews and Testimonials.103 While the 

Commission agrees that minimal 

evidence of a practice would be 

insufficient to meet the prevalence 

standard, section 18 did not require the 

Commission to find for its economywide rulemakings that every industry 

engaged in sales made at a consumer’s 

home or at certain other locations 

(Cooling-Off Rule), used credit contracts 

(Holder Rule), offered products at an 

advertised price when they did not have 

the advertised products in stock 

(Unavailability Rule), or had a robust 

mail, internet or telephone order 

business (Mail Order Rule); or that every 

industry used negative options 

(Negative Option Rule), had an issue 

with impersonating government 

agencies or businesses (Impersonator 

Rule), or used and abused reviews (Rule 

on the Use of Consumer Reviews and 

Testimonials). Imposing such a standard 

would artificially limit the 

Commission’s rulemaking authority 

under section 18 in a way that does not 

align with the Commission’s mandate or 

the text of the statute, which focuses on 

acts or practices generally and never 

mentions the need to define markets or 

industries. As explained herein and in 

the NPRM, the information evidencing 

prevalence of bait-and-switch pricing 

and misleading fees more than meets 

section 18’s standard for prevalence for 

the economy generally, and for the liveevent ticketing and short-term lodging 

industries, specifically, by 

demonstrating that the practices are 

widespread and, further, that such 

practices are occurring across a wide 

range of industries. 

Second, the Commission notes that, 

even when commenters challenged the 

application of the rule to specific 

pricing scenarios or to their own 

industries, they also appeared to 

concede that advertising a base price to 

which mandatory fees are added later is 

a frequent practice even in their own 

industries. While some commenters 

raised genuine challenges or questions 

about the application of the rule, others 

attempted to conflate such genuine 

challenges with their desire to continue 

to use drip or partition pricing. 

As discussed in section III.B.1, 

commenters from some ticket sellers did 

not contest that their advertised prices 

failed to include all mandatory fees and 

to provide the total price of goods or 

services. Instead, they attempted to 

explain why they engaged in those 

practices. 

Finally, some commenters from 

industries other than live-event 

ticketing and short-term lodging argued 

that the Commission’s NPRM failed to 

establish prevalence because of the 

following reasons: the cited cases 

focused on inapplicable fact patterns or 

resulted in settlement; the cited 

conferences called for additional 

research rather than regulatory strategy, 

or were narrow in scope as to the 

industries covered; and the resort fee 

warning letters failed to result in 

enforcement action.104 Commenters 

such as the U.S. Chamber of Commerce 

argued that the enforcement record 

should rely only on cease-and-desist 

orders or ‘‘extensive empirical 

research.’’ 105 Other commenters also 

raised concerns about a lack of 

empirical research.106 These 

commenters overlook section 18’s clear 

instruction that the Commission’s 

prevalence determination can be based 

on ‘‘any other information available to 

the Commission’’ that indicates a 

widespread pattern, which the 

Commission thoroughly laid out in the 

NPRM and expands upon herein. 

In sum, the Commission’s 

enforcement history, workshops, and 

reports, together with the record of this 

rulemaking and the enforcement cases 

brought by the Commission’s local, 

State, and international enforcement 

counterparts fully support a finding that 

bait-and-switch pricing that hides the 

total price of goods or services and 

misrepresenting the nature, purpose, 

amount, and refundability of fees or 

charges are prevalent across the 

economy, including in the live-event 

ticketing and short-term lodging 

industries.107 Despite the evidence that 

these specific practices are prevalent 

economy wide, the Commission will 

first focus its rulemaking authority on 

combatting these practices in the liveevent ticketing and short-term lodging 

industries, the two industries in which 

the Commission first began evaluating 

drip pricing more than a decade ago and 

for which there is a long history of 

consumer harm. 

B. Manner and Context in Which the 

Acts or Practices Are Deceptive or 

Unfair 

The final rule curbs certain unfair or 

deceptive pricing practices by requiring 


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108See Fed. Trade Comm’n, FTC Policy Statement 

on Deception, 103 F.T.C. 174, 175 (1984) (appended 

to In re Cliffdale Assocs., Inc., 103 F.T.C. 110, 174 

(1984) (hereinafter ‘‘Deception Policy Statement’’), 

https://www.ftc.gov/sites/default/files/documents/ 

commission_decision_volumes/volume-103/ftc_

volume_decision_103_january_-_june_1984pages_

103-203.pdf. 

109 Deception Policy Statement, 103 F.T.C. at 

182–83 (listing claims or omissions involving cost 

among those that are presumptively material); see 

also, e.g., FTC v. FleetCor Techs., Inc., 620 F. Supp. 

3d 1268, 1303–04, 1311 (N.D. Ga. 2022) (finding 

that representations about discounts and 

transaction fees were material). 110 Deception Policy Statement, 103 F.T.C. at 175 

(listing ‘‘misleading price claims’’ among those 

claims that the FTC has found to be deceptive); see 

also, e.g., In re Resort Car Rental Sys., Inc., 83 

F.T.C. 234, 281–82, 300 (1973), https://www.ftc.gov/ 

system/files/ftc_gov/pdf/Resort%20Car%20

Rental%20System%2C%20Inc.%2083%20FTC

%20234%20%281973%29.pdf (finding that using 

the name ‘‘Dollar-A-Day’’ misrepresented the price 

of car rentals in violation of section 5 of the FTC 

Act where a rental could not be attained for one 

dollar per day due to mileage, insurance, and other 

mandatory charges), aff’d sub. nom. Resort Car 

Rental Sys., Inc. v. FTC, 518 F.2d 962, 964 (9th Cir. 

1975). 

111See, e.g., Opinion of the Commission at 37– 

40, 47–50, In re Intuit Inc., No. 9408 (FTC Jan. 22, 

2024), https://www.ftc.gov/system/files/ftc_gov/pdf/ 

d09408_commission_opinion_redacted_public.pdf 

(finding that under the legal doctrine known as the 

first-contact or deceptive door-opener rule, 

respondent’s first contact with consumers was 

deceptive because its advertising falsely claimed 

that consumers can file their taxes for free with 

TurboTax and that later disclosures did not cure the 

deception); Complaint ¶¶ 12, 46–49, In re LCAVision, No. C–4789 (FTC Mar. 13, 2023) (alleging 

respondent’s advertisements misrepresented the 

price of surgery and failed to disclose eligibility 

limitations for a promotional price); Complaint 

¶¶ 8–10, In re Progressive Chevrolet Company, No. 

C–4578 (FTC Jun. 16, 2016) (alleging that 

respondents represented that consumers could lease 

vehicles at advertised down payment and monthly 

payment amounts, and deceptively failed to 

disclose a material condition that meant few 

consumers would qualify for the advertised terms); 

Resort Car Rental Sys., 518 F.2d at 964 (upholding 

the Commission’s order finding that the name 

‘‘Dollar-A-Day’’ was deceptive when charges adding 

up to more than one dollar per day were disclosed 

later). 

112E.g., In re Giant Food, Inc., 61 F.T.C. 326, 341– 

42, 361 (1962), https://www.ftc.gov/sites/default/

files/documents/commission_decision_volumes/ 

volume-61/ftcd-vol61july-december1962pages306- 

404.pdf (finding that comparative-price advertising 

of household goods and appliances created false, 

misleading, and deceptive impressions that induced 

consumers to make purchases based on mistaken 

beliefs); In re George’s Radio & Television Co., 60 

F.T.C. 179, 193–94, 196 (1962), https://www.ftc.gov/ 

sites/default/files/documents/commission_

decision_volumes/volume-60/ftcd-vol60januaryjune1962pages107-211.pdf (collecting cases and 

finding that advertisements including 

manufacturer’s suggested list prices that were 

higher than the customary retail prices were 

deceptive). 

113See, e.g., In re Filderman Corp., 64 F.T.C. 427, 

442–43, 461 (1964), https://www.ftc.gov/sites/ 

default/files/documents/commission_decision_

volumes/volume-64/ftcd-vol64january-march

1964pages409-511.pdf (finding, among other things, 

that respondents unlawfully advertised prices that 

were later inflated with mandatory service charges); 

In re Resort Car Rental Sys., 83 F.T.C. at 281–82, 

300; Opinion of the Commission at 37–40, 47–50, 

In re Intuit Inc., No. 9408 (finding that respondent’s 

advertising that falsely claimed that consumers can 

file their taxes for free with TurboTax was 

deceptive); Complaint ¶¶ 12, 46–49, In re LCAVision, No. C–4789 (alleging respondent’s 

advertisements misrepresented the price of surgery 

and failed to disclose eligibility limitations for a 

promotional price). See also cases cited supra note 

61 (collecting FTC enforcement actions alleging that 

bait-and-switch pricing tactics concerning hidden 

fees violated section 5). 

114 In re Filderman Corp., 64 F.T.C. at 461 

(ordering respondents to stop ‘‘[r]epresenting, 

directly or by implication: That any amount is the 

price of merchandise when an additional amount is 

required to be paid before the merchandise will be 

sold.’’) 

115Fed. Trade Comm’n, Enforcement Policy 

Statement on Deceptively Formatted 

Advertisements 7 n.25 (2015), https://www.ftc.gov/ 

system/files/documents/public_statements/896923/ 

151222deceptiveenforcement.pdf; see also Opinion 

of the Commission at 28–30, In re Intuit Inc., No. 

9408, https://www.ftc.gov/system/files/ftc_gov/pdf/ 

d09408_commission_opinion_redacted_public.pdf 

(finding that disclosures on Intuit’s websites were 

‘‘inadequate to cure a misimpression for Intuit’s 

ads,’’ which used ‘‘false claims to engage consumers 

and induce them to further interact with the 

company’’); Resort Car Rental Sys, 518 F.2d at 964 

(‘‘The Federal Trade [Commission] Act is violated 

if it induces first contact through deception, even 

if the buyer later becomes fully informed before 

entering the contract.’’) (bracketed text added); 

Exposition Press, Inc. v. FTC, 295 F.2d 869 (2d Cir. 

1961) (‘‘The law is violated if the first contact is 

secured by deception, even though the true facts are 

made known to the buyer before he enters into the 

contract of purchase.’’ (citations omitted)); FTC v. 

City W. Advantage, Inc., No. 2:08–cv–00609–BES– 

GWF, 2008 WL 2844696, at *3 (D. Nev., 123 July 

22, 2008) (finding defendant likely employed 

‘‘deceptive door openers . . . to induce consumers 

to stay on the line’’). 

116 15 U.S.C. 45(n). 

truthfulness and transparency in pricing 

for live-event ticketing and short-term 

lodging. Truthful, timely, and 

transparent pricing, including the 

nature, purpose, and amount of any fees 

or charges imposed, is critical for 

consumers—and also for honest 

businesses. The legal underpinning of 

the rule, or the manner and context in 

which the acts or practices defined by 

the rule are unfair or deceptive, is not 

complex. By identifying and targeting 

pricing tactics that hide the true price of 

live-event tickets and short-term lodging 

from consumers, the rule’s central 

provisions prohibit conduct that is 

inherently deceptive or unfair, 

including: (1) offering prices that do not 

include all mandatory fees or charges 

and (2) misrepresenting the nature, 

purpose, amount, and refundability of 

fees or charges, and the identity of the 

good or service for which the fees or 

charges are imposed. Thus, the final 

rule will allow American consumers to 

make better-informed purchasing 

decisions when purchasing live-event 

tickets or deciding where to stay on a 

short-term basis and level the playing 

field for honest businesses in these 

industries that truthfully, timely, and 

transparently disclose their pricing 

information. 

A representation, omission, or 

practice is deceptive under section 5 of 

the FTC Act if it is likely to mislead 

consumers acting reasonably under the 

circumstances and is material to 

consumers—that is, it would likely 

affect the consumer’s conduct or 

decisions with regard to a good or 

service.108 Price is a material term.109 It 

is a deceptive practice to misrepresent 

the price of a good or service,110

including through a deceptive first 

contact.111 Through its false savings 

cases, the Commission repeatedly found 

that it was deceptive under section 5 to 

present an inflated list price or 

comparison price, from which 

consumers were misled to believe that 

the business offered a lower-thannormal price.112 The inverse—luring 

consumers to a good or service with a 

false low price—is also deceptive.113

For example, in In re Filderman Corp., 

64 F.T.C. 427 (1964), the Commission 

found that the defendant violated 

section 5 both when it displayed 

misleading list prices and when it later 

imposed mandatory service charges on 

top of the advertised price.114 Once a 

consumer has been lured in by 

deception, including about the cost of 

the good or service, it is well established 

that a later disclosure cannot cure that 

deception.115 Thus, bait-and-switch 

pricing, where the initial contact with a 

consumer shows a lower or partial price 

without including mandatory fees, 

violates the FTC Act even if the total 

price is later disclosed. 

A practice is considered unfair under 

section 5 if: (1) it causes, or is likely to 

cause, substantial injury; (2) the injury 

is not reasonably avoidable by 

consumers; and (3) the injury is not 

outweighed by benefits to consumers or 

competition.116 Pricing that is not 

truthful or transparent causes or is 

likely to cause substantial injury; such 

injury is not reasonably avoidable by 

consumers or outweighed by benefits to 

consumers or competition. 

Drip pricing and other bait-andswitch tactics that hide the true price 

cause substantial injury, as the 

Commission discusses in detail in 

section V.E, by leading consumers to 

buy more goods or services, pay more 

for those goods or services, and incur 

higher search costs than they otherwise 

would have if they had been presented 

with the true price upfront. Studies 

have shown that consumers spend more 

money on the same goods when faced 

with drip pricing, i.e., when they are not 

shown the total price upfront, but 

instead are shown a base price, with 

mandatory fees or charges added later 


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117Alexander Rasch et al., Drip Pricing and its 

Regulation: Experimental Evidence, 176 J. Econ. 

Behav. & Org. 353 (2020) (‘‘[E]xperimental evidence 

suggests that consumers indeed strongly and 

systematically underestimate the total price under 

drip pricing, and that they make mistakes when 

searching’’); Shelle Santana et al., Consumer 

Reactions to Drip Pricing, 39 Mktg. Sci. 188 (2020) 

(‘‘Across six studies, we find that drip pricing 

(versus nondrip pricing) increases the likelihood 

that consumers will both initially and ultimately 

select a lower base price option, even though the 

surcharges for optional add-ons cause this base 

price to balloon—making the lower base fare option 

more expensive than the alternative’’); Tom Blake 

et al., Price Salience and Product Choice, 40 Mktg. 

Sci. 619 (2021); Steffen Huck et al., The Impact of 

Price Frames on Consumer Decision Making: 

Experimental Evidence (2015); Meghan R. Busse & 

Jorge M. Silva-Risso, ‘‘One Discriminatory Rent’’ or 

‘‘Double Jeopardy’’: Multi-component Negotiation 

for New Car Purchases, 100 a.m. Econ. Rev. 470 

(2010); Raj Chetty et al., Salience and Taxation: 

Theory and Evidence, 99 a.m. Econ. Rev. 1145 

(2009) (‘‘[C]ommodity taxes that are included in 

posted prices reduce demand significantly more 

than taxes that are not included in posted prices.’’); 

see also FTC–2023–0064–3247 (Private Law Clinic 

at Yale Law School). 

118Sullivan, supra note 67, at 4; FTC–2023–0064– 

3271 (U.S. Senate, Sen. Amy Klobuchar). 

119Sullivan, supra note 67, at 22–24; Vicki G. 

Morowitz et al., Divide and Prosper: Consumers’ 

Reactions to Partitioned Prices, 35 J. Mktg. Rsch. 

453 (1998) (subjects exposed to partitioned prices 

recalled significantly lower total product costs than 

subjects exposed to combined prices). 

120Sullivan, supra note 67, at 4; Fed. Trade 

Comm’n, ‘‘That’s the Ticket’’ Workshop: Staff 

Perspective 4 (May 2020), https://www.ftc.gov/ 

system/files/documents/reports/thats-ticketworkshop-staff-perspective/staffperspective_tickets_

final-508.pdf; see also Han Hong et al., Using Price 

Distributions to Estimate Search Costs, 37 RAND J. 

Econ. 257 (2006) (describing methods of estimating 

search costs). 

121NPRM, 88 FR 77433 n.170. 

122FTC–2023–0064–3212 (TickPick, LLC) (‘‘[On] 

StubHub’s website, for example, a consumer can be 

required to click 12 times after being shown the first 

price before being shown the total price they will 

pay.’’) 

123See, e.g., Decision & Order at 3–4, In re LCAVision, No. C–4789 (FTC Mar. 13, 2023) (settling 

allegations that deceptive advertising caused 

consumers to ‘‘waste[ ] 90 minutes to two hours of 

their time’’ responding to a deceptive promotion, 

Complaint ¶ 35, and prohibiting misrepresentations 

of price and requiring disclosure of price or 

discount qualification requirements), https://

www.ftc.gov/system/files/ftc_gov/pdf/1923157-lcavision-consent-package.pdf; Decision & Order at 2– 

3, In re Credit Karma, LLC, No. C–4781 (FTC, Jan. 

19, 2023) (settling allegations that deceptive 

advertising caused consumers to waste significant 

time in applying for ‘‘pre-approved’’ offers that 

were denied, Complaint ¶ 13, and requiring Credit 

Karma to pay $3 million in monetary relief), https:// 

www.ftc.gov/system/files/ftc_gov/pdf/2023138- 

credit-karma-combined-final-consent-withoutsignatures.pdf; FTC v. Amazon.com, Inc., No. C14– 

1038–JCC, 2016 U.S. Dist. LEXIS 55569, at *17 

(W.D. Wash., Apr. 26, 2016) (finding consumer 

injury included ‘‘time spent pursuing those 

refunds’’); FTC v. Neovi, Inc., 598 F. Supp. 2d 1104, 

1115 (S.D. Cal. 2008) (finding ‘‘no genuine issue of 

material fact that consumers suffered substantial 

injury’’ based on ‘‘considerable amount of time’’ 

spent by consumers); FTC v. Accusearch, Inc., No. 

06–cv–105–D, 2007 U.S. Dist. LEXIS 74905, at *22– 

23 (D. Wyo., Sept. 28, 2007) (granting summary 

judgment in favor of FTC based in part on finding 

of consumer injury for ‘‘lost time and 

productivity’’). 

124FTC–2023–0064–3212 (TickPick, LLC). 

125 Id. 

126NPRM, 88 FR 77434 (discussing various 

cognitive biases that contribute to the 

unavoidability of consumer injury, including the 

anchoring theory, the endowment theory, and the 

sunken cost fallacy). 

127 Inst. for Policy Integrity, Pet. for Rulemaking 

Concerning Drip Pricing 18 (2021), https://policy

integrity.org/documents/Petition_for_Rulemaking_

Concerning_Drip_Pricing.pdf. 

128Steffen Huck et al., The Impact of Price 

Frames on Consumer Decision Making: 

Experimental Evidence (2015). 

129 David A. Friedman, Regulating Drip Pricing, 

31 Stan. L. & Pol’y Rev. 51, 55 n.13 (2020). 

130See NPRM, 88 FR 77447 (discussing 

reductions in search costs from the proposed rule). 

throughout the buying process.117

Where mandatory fees or charges are 

disclosed at the same time as, but 

separately from, the base price, 

consumers are still harmed. The 

practice of dividing the price into 

multiple components without disclosing 

the total, generally referred to as 

partitioned pricing, distorts consumer 

choice.118 Consumers confronted with 

partitioned pricing, on average, 

underestimate the total price of the good 

or service, likely because they use 

mental shortcuts to estimate price that 

do not fully account for each 

component.119

In addition, consumers who wish to 

compare prices incur additional search 

costs to make direct comparisons of 

goods or services when the full price is 

not disclosed upfront.120 For example, 

in an online transaction to book a hotel 

room, consumers cannot simply view 

the first price displayed on each 

website, but instead need to navigate to 

subsequent pages or even enter all their 

payment information and reach the 

checkout page for each website to 

determine the true total price of their 

hotel stay.121 The same is true on liveevent ticketing websites. As TickPick, 

LLC noted, ‘‘[m]ajor ticketing 

marketplaces often require consumers to 

enter their credit card or other payment 

information prior to disclosing 

mandatory fees. On these marketplaces, 

the full purchase price is only disclosed 

after payment information is 

collected.’’ 122 Under such 

circumstances, consumers waste time 

and effort pursuing an offer that is not 

actually available at the promised price. 

Such search costs that result from unfair 

or deceptive practices are legally 

cognizable injuries under the FTC 

Act.123

Misrepresented fees also cause or are 

likely to cause substantial injury—they 

harm consumers as well as businesses 

that do not engage in these practices. 

For example, as discussed in section 

III.C, a hotel might charge a resort fee 

when only typical and ordinary 

accommodations and amenities are 

offered, an environmental fee that serves 

no environmental purpose, or a fee 

misrepresented as a government charge. 

As TickPick, LLC put it, misrepresented 

fees trick consumers into paying more 

and ultimately inhibit competition by 

providing an unfair advantage to 

businesses that misrepresent their 

fees.124 Likewise, when businesses 

misrepresent fees, consumers are unable 

to make informed choices about the 

value of the fee or charge, or the good 

or service it represents, because their 

understanding of the fee or charge is 

predicated on false, vague, or otherwise 

misleading information. As such, 

consumers are unable to understand 

what they have purchased, or to which 

charges they have consented.125

Consumers cannot reasonably avoid 

these harms. As explained in the NPRM, 

studies suggest that cognitive bias may 

prevent consumers from reasonably 

avoiding injury caused by unfair and 

deceptive pricing practices.126 Several 

behavioral studies explain why 

consumers cannot reasonably avoid 

making errors when the true price is not 

displayed upfront. Behavioral research 

shows that consumers who first learn of 

a lower price do not properly adjust 

their calculations when additional fees 

are added, thereby underestimating the 

total price.127 It also shows that 

consumers attach value to things they 

perceive to be theirs and, once 

consumers begin the purchase process, 

their perception shifts so that stopping 

the transaction feels like a loss.128 The 

research shows that consumers who 

already have invested in an endeavor, 

such as by taking time to make 

selections on a travel or live-event ticket 

website, continue that endeavor even if 

they would pay less if they began again 

elsewhere.129 Lastly, consumers 

necessarily incur search costs when 

mandatory fees are obscured because it 

takes them longer to discover the full 

price within a single transaction and to 

comparison shop across transactions.130

Notably, it is unlikely that the market 

can correct for these injuries because 

once the practice of displaying 

incomplete initial prices takes hold, 

honest businesses will struggle to 

compete. For example, as noted in the 

NPRM, one market participant in the 

live-event ticketing industry, StubHub, 

unilaterally adopted all-in pricing in 

2014 but soon reverted back to its 

original model after it lost significant 

market share when customers 


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131See NPRM, 88 FR 77434 (quoting Fed. Trade 

Comm’n, ‘‘That’s the Ticket’’ Workshop: Staff 

Perspective 4 (May 2020), https://www.ftc.gov/ 

system/files/documents/reports/thats-ticketworkshop-staff-perspective/staffperspective_tickets_

final-508.pdf.). See also, e.g., https://www.contact

lensking.com/faq.aspx (describing a contact lens 

company’s decrease in traffic and total orders when 

it displayed a total price while competitors 

implemented ‘‘processing’’ fees). 

132FTC–2023–0064–3187 (U.S. Department of 

Justice, Antitrust Division, observed that ‘‘[w]hen 

consumers lack choice and information, and are 

saddled with mandatory hidden fees, the benefits 

of the competitive process break down.’’); see also 

FTC–2023–0064–3106 (American Society of Travel 

Advisors); FTC–2023–0064–3184 (New York State 

Sen. Michael Gianaris); FTC–2023–0064–1294 

(James J. Angel, Ph.D., CFP, CFA, Professor, 

Georgetown University, McDonough School of 

Business). 

133FTC–2023–0064–3212 (TickPick, LLC). 134FTC–2023–0064–3106 (American Society of 

Travel Advisors). 135FTC–2023–0064–3028 (Competitive Enterprise 

Institute argued that consumers already bear a 

search cost merely by looking for a product, and 

that any advertisement that includes some, but not 

all, pricing information, benefits the searching 

consumer if the information is accurate and nondeceptive.). 136 Id. 137FTC–2023–0064–2886. 138FTC–2023–0064–3127 (U.S. Chamber of 

Commerce noted that, among these pricing 

practices, dynamic pricing strategies provide these 

benefits to consumers and this was ignored in the 

conclusions of the NPRM.). 

139 Deception Policy Statement, 103 F.T.C. at 

182–183, 183 n.55 (listing claims or omissions 

involving cost among those that are presumptively 

material); see also, e.g., FleetCor Techs., Inc., 620 

F. Supp. 3d at 1303–04, 1311 (finding that 

representations about discounts and transaction 

fees were material); FTC v. Windward Marketing, 

Inc., No. 1:96–CV–615F, 1997 WL–33642380, at *10 

(N.D. Ga., Sept. 30, 1997) (‘‘[A]ny representations 

concerning the price of a product or service are 

presumptively material’’). 

140 Deception Policy Statement, 103 F.T.C. at 175 

(listing ‘‘misleading price claims’’ among those 

claims that the FTC has found to be deceptive); see 

also, e.g., Resort Car Rental Sys., 518 F.2d at 964 

(upholding the Commission’s order finding that 

using the name ‘‘Dollar-A-Day’’ misrepresented the 

price of car rentals in violation of section 5 of the 

FTC Act). 

141See, e.g., FTC–2023–0064–3162 (BBB National 

Programs Inc. stated that BBB National Advertising 

Division ‘‘precedent is clear that the advertised 

price for a product or service is among one of the 

most material terms to a consumer’s purchasing 

decision.’’). 

incorrectly perceived StubHub’s prices 

to be higher.131

The consumer injury caused by these 

bait-and-switch pricing practices is not 

outweighed by any benefits to 

consumers or competition. Consumers 

receive no benefit from businesses that 

use drip pricing, partitioned pricing, or 

misleading price presentation while 

they obscure the total price. To the 

extent that consumers could benefit 

from itemized information about price 

components, such itemization can be 

done in conjunction with clear total 

price information. Consumers receive 

no benefit from businesses partitioning 

or breaking up mandatory price 

components while they obscuring the 

total price. 

Likewise, as discussed in section V.E, 

there is no benefit to competition, as 

honest businesses that disclose allinclusive total prices lose market share 

to businesses that do not. Bait-andswitch pricing and misleading fees 

undermine the ability of honest 

businesses to compete on price and 

therefore diminish the competitive 

pressure in a market that pushes prices 

downward. As a result, these practices 

lead to higher prices than would be 

supported in a competitive marketplace. 

The Antitrust Division of the U.S. 

Department of Justice noted that 

‘‘companies that impose mandatory 

hidden fees’’ have ‘‘an unfair advantage 

over honest brokers’’ and interfere with 

consumers’ ability to ‘‘choose between 

competitors based on the important 

considerations of price and what, 

exactly, the consumer is 

purchasing.’’ 132 Some commenters, 

including those from the live-event 

ticketing and short-term lodging 

industries, noted that bait-and-switch 

pricing not only confuses consumers, 

but harms honest businesses that offer 

truthful, timely, and transparent pricing 

because their prices initially may seem 

higher than competitors that use baitand-switch pricing and misleading fees. 

For example, TickPick, LLC 

commended the Commission for 

proposing to curb the widespread 

practice of bait-and-switch pricing and 

observed that ‘‘the proposed rule would 

significantly benefit consumers and 

competition in the live-event ticketing 

industry.’’ 133 The American Society of 

Travel Advisors argued that, in addition 

to consumer harm, ‘‘the imposition of 

undisclosed fees also unfairly places 

honest retailers—those that do disclose 

the full, all-in price upfront—at a 

competitive disadvantage relative to 

those that do not.’’ 134

A minority of commenters stated that 

hidden and misleading fees do not harm 

consumers. For instance, the 

Competitive Enterprise Institute argued 

that consumers’ search costs do not 

increase when advertisements lack a 

single total price, as the consumer is 

better informed after watching the 

advertisement despite the omission.135

While the commenter conceded that 

consumers may benefit more if a total 

price is disclosed, the commenter 

argued that any harm could be easily 

avoidable by consumers calculating the 

total themselves.136 Some commenters 

also argued that these types of fees often 

benefit consumers and are openly 

disclosed.137 Indeed, the American 

Gaming Association stated that resort 

fees enhance a consumer’s stay, 

distinguish resorts from more standard 

lodging offerings, are openly disclosed 

to consumers, and often appear several 

times throughout the search and 

purchasing process. As the Commission 

already noted, drip and partitioned 

pricing and other bait-and-switch 

pricing harm consumers for numerous 

reasons, including because consumers 

underestimate the total price of a good 

or service, overconsume, overpay, and 

waste time. The U.S. Chamber of 

Commerce argued that there are proconsumer and pro-competitive 

justifications for this type of pricing, 

including allowing for dynamic pricing 

strategies and preventing consumers 

from paying for services that they do not 

use.138 The rule, however, does not 

prohibit the use of dynamic pricing 

strategies, itemization, or offering 

optional goods or services for 

consumers to select; it simply prohibits 

offering a price that is not inclusive of 

all mandatory fees and charges, as well 

as prohibiting misrepresented fees and 

charges. 

As stated herein, the Commission and 

courts have previously recognized that 

price is a material term 139 and that it is 

a violation of section 5 of the FTC Act 

to misrepresent the price of a good or 

service.140 Commenters emphasized the 

materiality of price to consumers.141

The commenters who argue that baitand-switch pricing does not harm 

consumers ignore the large body of 

literature demonstrating that drip 

pricing and partitioned pricing have a 

negative impact on consumers and 

competition. The economic analysis in 

Section V provides additional 

discussion regarding the economic 

harms from bait-and-switch pricing 

tactics, including drip pricing and 

partitioned pricing in the live-event and 

short-term lodging industries. 

C. The Economic Effect of the Rule 

As part of the rulemaking proceeding, 

the Commission solicited public 

comment and data (both qualitative and 

quantitative) on the economic impact of 

the proposed rule and its costs and 

benefits. In issuing this final rule, the 

Commission has carefully considered 

the comments received and the costs 

and benefits of each provision, taking 

into account the effects on small 

businesses and consumers, as discussed 

in more detail in sections V and VII. 

The record demonstrates that the most 

significant anticipated benefits of the 

final rule are promoting transparent 

pricing, facilitating comparison 

shopping for consumers, and leveling 


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142The relationship between social trust and 

market outcomes is well established. See, e.g., Paul 

J. Zak & Stephen Knack, Trust and growth. 111 

Econ. J., 470 (Mar. 2001), https://doi.org/10.1111/ 

1468-0297.00609; Philip Keefer & Stephen Knack, 

Does Social Capital Have an Economic Payoff? A 

Cross-Country Investigation, 112 Q.J. Econ. 4 (Nov. 

1997), https://doi.org/10.1162/003355300555475. 

Social trust is particularly necessary for 

participation in financial markets. See Jesse Bricker 

& Geng Li, Fed. Reserve Bd., Credit Scores, Social 

Trust, and Stock Market Participation, Finance and 

Economics Discussion Series 2017–008r1, https://

doi.org/10.17016/FEDS.2017.008r1; Luigi Guiso, 

Paola Sapienza, & Luigi Zingales, Trust the Stock 

Market, 63 J. Fin. (Dec. 2008), https://www.jstor.org/ 

stable/20487944?seq=1. 

143 Ginny Seung Choi & Virgil Henry Storr, 

Market interactions, trust and reciprocity, 15 PLOS 

One 5 (May 7, 2020), https://doi.org/10.1371/ 

journal.pone.0232704. 

144 Joshua Kleinfeld & Hadar Dancig-Rosenberg, 

Social Trust in Criminal Justice: A Metric, 98 Notre 

Dame L. Rev. 815 (2022), https://

scholarship.law.nd.edu/ndlr/vol98/iss2/6. 

145AMG Cap. Mgmt., 593 U.S. at 82. 

146See 15 U.S.C. 57b(a)(1) and (2); see also 

NPRM, 88 FR 77438 (discussing impact of AMG 

Cap. Mgmt.). When the Commission has reason to 

believe that the rule has been violated, the 

Commission can commence a Federal court action 

to ask a Federal judge to determine liability and, if 

proven, require violators to provide redress. See 15 

U.S.C. 57b(a)(1), (b). Without the rule, the path to 

court-ordered redress is longer. The Commission 

must first conduct an administrative proceeding to 

determine whether the respondent engaged in 

unfair or deceptive acts or practices in violation of 

section 5(a) of the FTC Act. If the Commission finds 

that the respondent did so, the Commission issues 

a cease-and-desist order, which might not become 

final until after the resolution of any resulting 

appeal to a Federal court of appeals. Then, to obtain 

redress, the Commission must initiate a second 

action in Federal district court, in which it must 

prove that the violator engaged in objectively 

fraudulent or dishonest conduct in order to obtain 

court-ordered redress. See 15 U.S.C. 57b(a)(2), (b). 

147See section 5(m)(1)(A) of the FTC Act, 15 

U.S.C. 45(m)(1)(A) (providing that those who 

violate a trade regulation rule ‘‘with actual 

knowledge or knowledge fairly implied on the basis 

of objective circumstances that such act is unfair or 

deceptive and is prohibited by such rule’’ are liable 

for civil penalties for each violation). In addition, 

any entity or person who violates such a rule 

(irrespective of the state of knowledge) is liable for 

any injury caused to consumers by the rule 

violation. The Commission may pursue such 

recovery in a suit under section 19(a)(1) of the FTC 

Act, 15 U.S.C. 57b(a)(1). 

148NPRM, 88 FR 77447–48. 

the playing field for businesses in the 

live-event ticketing and short-term 

lodging industries. By prohibiting drip 

pricing, the final rule also will promote 

social trust, which is a necessary 

component of successful market 

interactions.142 Most participants in a 

market transaction do not have prior 

experience with one another and 

consumers must rely on some degree of 

trust that the business will provide the 

good or service in question, at the stated 

price and quality level. Without social 

trust, it would be costlier for both 

consumers and businesses to acquire all 

the necessary information to participate 

in the market. While there has been less 

research on the relationship between 

social trust and previous market 

interactions, there is some evidence that 

bad market experiences can reduce 

social trust.143 Thus, prohibiting these 

types of deceptive and unfair practices 

will promote social trust, which can be 

a measure of a well-functioning 

market.144

Another beneficial consequence 

would be the expansion of the remedies 

available for violations of the final rule, 

including the ability to more effectively 

obtain monetary relief for consumers 

who have been deceived about the true 

total price of live-event tickets or shortterm lodging. This is particularly critical 

given the U.S. Supreme Court’s decision 

in AMG Capital Mgmt., LLC v. FTC, 593 

U.S. 67 (2021), which held that 

equitable monetary relief, including 

consumer redress, is not available under 

section 13(b) of the FTC Act.145 Under 

the final rule, the Commission will now 

be able to seek court-ordered consumer 

redress in one Federal district court 

action brought under section 19(a)(1), 

rather than the longer, less efficient, 

two-step process for obtaining redress 

under section 19(a)(2).146 By allowing 

the Commission to secure redress more 

efficiently, this rule will also allow the 

Commission to conserve its limited 

enforcement resources for other mission 

priorities. 

As an additional benefit, the rule will 

enable the Commission to seek civil 

penalties against violators. The FTC Act 

generally does not allow the 

Commission to obtain civil penalties 

against those who engage in unfair or 

deceptive acts or practice in violation of 

section 5(a) of the FTC Act. Section 

5(m)(1)(A) of the FTC Act does, 

however, authorize the Commission to 

seek civil penalties in court for 

violations of trade regulation rules, such 

as the final rule here.147 The ability to 

obtain civil penalties provides two 

benefits. First, court-ordered civil 

penalties give the Commission the 

ability to ensure that violators do not 

retain the profits they earn by engaging 

in the unfair or deceptive pricing 

practices prohibited by the rule. Second, 

the potential for civil penalties will 

deter violations and provide a strong 

incentive for businesses providing liveevent tickets and short-term lodging to 

provide truthful and transparent pricing 

information in compliance with the 

rule, which will have consumer welfare 

benefits and will benefit honest 

competition.148

When promulgating a final rule, the 

Commission must prepare a final 

regulatory analysis, which is contained 

in section V. The final regulatory 

analysis contains an estimated costbenefit analysis of the final rule, as well 

as a more in-depth discussion of the 

comments the Commission received in 

response to the NPRM. In addition, the 

Commission’s final regulatory flexibility 

analysis, which is contained in section 

VII, discusses the final rule’s economic 

impact on small entities. 

III. Section-by-Section Analysis 

The Commission has carefully 

considered the rulemaking’s extensive 

comment record. It has weighed 

considerations raised by individual 

consumers, businesses (including small 

businesses), industry advocates, 

consumer advocates, labor 

representatives, academics, and other 

law enforcement bodies. After 

considering these comments, the 

Commission finalizes this rule to 

address a subset of the specific unfair 

and deceptive practices identified in the 

NPRM. The rule will help ensure that 

consumers shopping for live-event 

tickets and short-term lodging see 

advertised prices that include all 

mandatory fees, can obtain such goods 

or services at those prices, and know 

what they are paying for. The rule 

promotes honest and transparent pricing 

for consumers and a level playing field 

for businesses. 

Numerous public comments in 

support of and in opposition to the rule 

included discussions of the definitions 

and substantive provisions of the 

proposed rule, and made various 

recommendations. The Commission 

considered comments pointing out 

confusion about specific phrases in the 

proposed rule, particularly phrases that 

commenters found vague or overbroad. 

The Commission also took notice of 

comments that suggested some entities 

or transactions would be subject to 

overlapping Federal regulations 

regarding pricing disclosures that could 

result in confusion to consumers or 

businesses. In addition, the Commission 

appreciated comments from industry 

that identified potential gaps in how the 

proposed rule would interact with 

certain types of pricing practices. 

The Commission makes a number of 

changes to the final rule. Notably, the 

Commission narrows the application of 

the final rule to offers, displays, or 

advertisements of a covered good or 

service—i.e., live-event tickets or shortterm lodging. The Commission 

recognizes that many comments to the 

proposed rule focused on the 

application of the rule to specific 

industries or pricing scenarios. As a 

result of the Commission’s decision to 

limit this final rule to live-event 

ticketing and short-term lodging, the 


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149FTC–2023–0064–3191 (Community Catalyst et 

al.); FTC–2023–0064–3283 (National Consumer Law 

Center, Prison Policy Initiative, and advocate 

Stephen Raher). 

150FTC–2023–0064–3268 (Housing & Eviction 

Defense Clinic, University of Connecticut School of 

Law, commented ‘‘the definition of an ‘Ancillary 

Good or Service’ should be amended to include all 

fees that are not reasonably avoidable and all fees 

or charges for goods or services that a reasonable 

consumer would expect to be included with the 

purchase.’’); FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice et al. 

recommended the definition of ‘‘Ancillary Good or 

Service’’ be revised ‘‘to mean ‘any optional, 

additional good(s) or service(s), offered to a 

consumer as part of the same transaction, that a 

reasonable consumer would not expect to be 

included with the purchase of the advertised good 

or service.’’); FTC–2023–0064–3160 (Consumer 

Federation of America et al. proposed the definition 

of ‘‘Ancillary Good or Service’’ be modified to ‘‘any 

optional, additional good(s) or service(s), offered to 

a consumer as part of the same transaction, that a 

reasonable consumer would not expect to be 

included with the purchase of the advertised good 

or service.’’). 

151 Deception Policy Statement, 103 F.T.C. at 175, 

177–82; see also FTC v. Cantkier, 767 F. Supp. 2d 

147, 151–52 (D.D.C. 2011) (applying deception 

standard set forth in the Deception Policy 

Statement); POM Wonderful, LLC v. FTC, 777 F.3d 

478, 490, 500 (D.C. Cir. 2015) (applying deception 

standard set forth in the Deception Policy Statement 

and upholding administrative law judge 

determination that ‘‘ ‘a significant minority’ of 

‘reasonable’ consumers ‘would interpret [the ad] to 

be claiming that drinking eight ounces of POM Juice 

daily prevents or reduces the risk of heart 

disease.’ ’’); FTC v. World Travel Vacation Brokers, 

Inc., 861 F.2d 1020, 1029 (7th Cir. 1988) (upholding 

lower court’s determination that ‘‘ ‘the $29 airfare 

promotion constituted the type of misrepresentation 

upon which a reasonably prudent person would 

rely’ ’’); Fed. Trade Comm’n, FTC Policy Statement 

on Unfairness (appended to In re Int’l Harvester Co., 

104 F.T.C. 949, 1070, 1073 (1984), (hereinafter 

‘‘Unfairness Policy Statement’’), https://

www.ftc.gov/sites/default/files/documents/ 

commission_decision_volumes/volume-104/ftc_

volume_decision_104__july_-_december_

1984pages949_-_1088.pdf (‘‘To justify a finding of 

unfairness the [consumer] injury must . . . be an 

injury that consumers themselves could not 

reasonably have avoided.’’). 

152 Deception Policy Statement, 103 F.T.C. at 175, 

179 (‘‘For instance, if a company markets a cure to 

the terminally ill, the practice will be evaluated 

from the perspective of how it affects the ordinary 

member of that group.’’). 

153FTC–2023–0064–3292 (National Association 

of Theatre Owners). 

154FTC–2023–0064–3206 (Motor Vehicle 

Protection Products Association et al.). 

Commission need not respond to each 

of these comments at this time. 

In addition, wherever possible, the 

Commission works to reduce burden on, 

and maintain pricing flexibility for, 

businesses. Finally, the Commission 

provides guidance and explanation to 

respond to specific questions and 

hypotheticals posed by commenters to 

help give additional clarity to 

businesses. The following discussion 

provides a section-by-section analysis of 

the NPRM’s proposed provisions and 

the provisions adopted in the final rule, 

as well as a discussion of the comments 

received and the Commission’s 

responses. 

A. § 464.1 Definitions 

Proposed § 464.1 contained 

definitions for the following terms: 

‘‘ancillary good or service’’; ‘‘business’’; 

‘‘clear(ly) and conspicuous(ly)’’; 

‘‘government charges’’; ‘‘pricing 

information’’; ‘‘shipping charges’’; and 

‘‘total price.’’ The Commission received 

various comments with respect to these 

definitions, including particular 

industries’ requests for exemption from 

the definition of ‘‘business’’ and other 

suggestions. Section 464.1 of the final 

rule adopts these definitions, in some 

instances with minor modifications for 

clarification, and adds a definition for 

‘‘covered good or service.’’ In the 

definition-by-definition analysis, the 

Commission discusses each definition 

proposed in the NPRM, any changes to 

the definition’s text, the added 

definition, and other comments relevant 

to the definitions section that are not 

otherwise addressed in the discussion of 

the final rule’s substantive provisions. 

1. Ancillary Good or Service 

Proposed § 464.1(a) in the NPRM 

defined ‘‘ancillary good or service’’ as 

‘‘any additional good(s) or service(s) 

offered to a consumer as part of the 

same transaction.’’ This definition was 

relevant to the definition of ‘‘total 

price,’’ in proposed § 464.1(g), which 

specified that any mandatory fees or 

charges for such goods or services 

would be included in total price. 

Commenters proposed modifications to 

the definition of ‘‘ancillary good or 

service’’ but, following review of those 

comments and as discussed in this 

section, the Commission declines to 

adopt the suggested modifications. Final 

§ 464.1 adopts the definition of 

‘‘ancillary good or service’’ without 

modification. 

Several commenters recommended 

that the Commission modify the 

definition of ‘‘ancillary good or service’’ 

to state that fees charged by a third party 

must be included in total price if those 

fees are part of the same transaction.149

As stated in the NPRM, if a business 

advertises a price for a good or service 

that requires an ancillary good or 

service provided by another entity, the 

charge for the mandatory ancillary good 

or service must be included in total 

price. Additionally, the NPRM made 

clear that the definition includes goods 

and services (whether from the seller or 

third parties) offered as part of the same 

transaction, because it included 

examples of mandatory ancillary goods 

or services that may be offered by thirdparty providers but are part of the same 

transaction, such as a payment 

processing fee for an online transaction. 

Accordingly, the Commission does not 

believe that it is necessary to modify the 

definition of ‘‘ancillary good or service’’ 

to clarify that fees charged by a third 

party must be included in total price if 

those fees are part of the same 

transaction. 

Several commenters also suggested 

that the Commission add language 

referring to a reasonable consumer in 

the definition of ‘‘ancillary good or 

service,’’ to clarify that only goods or 

services that a ‘‘reasonable consumer’’ 

would expect to be included must be 

included in total price.150 The 

Commission does not believe that 

adding ‘‘reasonable consumer’’ to the 

definition of ‘‘ancillary good or service’’ 

is necessary, as the reasonable consumer 

standard is implicit in the rule text. 

Under longstanding precedent, the 

Commission examines conduct from the 

perspective of a consumer acting 

reasonably under the circumstances.151

If a representation or practice affects or 

is directed primarily to a particular 

group, the Commission examines 

reasonableness from the perspective of 

an ordinary member of that group.152

Accordingly, the Commission does not 

believe it is necessary to modify the 

definition of ‘‘ancillary good or service’’ 

to refer to a reasonable consumer. 

One commenter argued, in the context 

of online movie ticket purchases, that 

online convenience fees are reasonably 

avoidable because consumers can 

purchase tickets in-person at a theater 

without incurring the fees.153 Although 

a movie ticket is not a covered good or 

service, similar convenience fees are 

common in the live-event ticketing 

industry. The Commission disagrees 

with the commenter that online 

convenience fees are reasonably 

avoidable: If a consumer must pay a 

service or other fee in order to purchase 

tickets online (i.e., as part of the same 

transaction), then such a fee must be 

included in total price when it appears 

online. In addition, using vague fee 

descriptions, such as an unspecified 

‘‘convenience’’ fee, may violate 

§§ 464.2(c) and 464.3 by failing to 

disclose clearly and conspicuously, and 

by misrepresenting, the nature or 

purpose of fees or the identity of the 

good or service for which fees or charges 

are imposed. 

Another commenter argued that the 

definition of ‘‘ancillary good or service’’ 

should ‘‘not turn on whether the good 

or service is ‘offered’ to a consumer but 

whether it is ‘required to be purchased’ 

by the consumer.’’ 154 The commenter 

proposed that the Commission 


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155See infra section III.A.8.a. 

156The Commission notes that several 

commenters misinterpreted the definition of 

‘‘Ancillary Good or Service’’ as necessarily being 

optional. See, e.g., FTC–2023–0064–3145 

(Association of National Advertisers, Inc. stated that 

‘‘Ancillary fees, by definition, are not ‘mandatory’ 

and should not be characterized as ‘mandatory’ fees 

subject to the proposed disclosure requirements.’’); 

FTC–2023–0064–1425 (Iowa Bankers Association 

stated, ‘‘While the definition of Total Price includes 

‘mandatory’ Ancillary Goods or Services, the actual 

definition [of Ancillary Good or Service] seems to 

speak to the discretionary aspect of this term.’’). 

The Commission reiterates that the rule text is clear: 

Ancillary Goods or Services may be mandatory or 

optional, depending on the facts of a particular 

transaction. 

157FTC–2023–0064–3172 (New Jersey Apartment 

Association); FTC–2023–0064–3296 (Bay Area 

Apartment Association). 

158FTC–2023–0064–3206 (Motor Vehicle 

Protection Products Association et al.). 

159 16 CFR part 463. 

160See, e.g., FTC–2023–0064–2887 (Progressive 

Policy Institute); FTC–2023–0064–3160 (Consumer 

Federation of America et al.); FTC–2023–0064–3275 

(Berkeley Center for Consumer Law & Economic 

Justice et al.). 

161E.g., FTC–2023–0064–3276 (Automotive 

Service Association); FTC–2023–0064–3206 (Motor 

Vehicle Protection Products Association et al.); 

FTC–2023–0064–3189 (National Automobile 

Dealers Association); FTC–2023–0064–3121 

(National Independent Automobile Dealers 

Association). 

162E.g., FTC–2023–0064–3263 (Flex Association); 

FTC–2023–0064–3202 (TechNet); FTC–2023–0064– 

3238 (Gibson, Dunn & Crutcher LLP). 

incorporate the word ‘‘mandatory’’ into 

the definition of ‘‘ancillary good or 

service.’’ The Commission disagrees 

with this proposed modification. As 

discussed in the NPRM, an ancillary 

good or service may be mandatory or 

optional. Whether the cost of the 

ancillary good or service must be 

incorporated into total price turns on 

whether the good or service is 

mandatory, which depends on the facts 

of a transaction.155 For example, if a 

hotel offers a consumer the option to 

purchase or decline a trip protection 

plan with a room reservation, the plan 

would be an optional ancillary good or 

service because the consumer has the 

option to decline the trip insurance. 

Conversely, a hotel may require all 

guests to purchase a daily breakfast 

voucher. In this case, the hotel guest 

cannot avoid being charged for the 

voucher, and it is a mandatory ancillary 

good or service. If a business charges 

payment processing fees that the 

consumer cannot reasonably avoid, such 

fees would be for a mandatory ancillary 

good or service. 

It is also possible that a good or 

service may be mandatory in one 

transaction but optional in another.156

For example, if a hotel allows a guest to 

purchase amenities such as bottled 

water or pool towels for an additional 

fee but permits each guest to supply 

their own water or pool towels, such 

amenities would be optional ancillary 

goods or services. If, however, the hotel 

requires all patrons to use the hotelprovided amenities for a fee, then the 

amenities would be mandatory ancillary 

goods or services. Because ancillary 

goods or services may be either 

mandatory or optional, the Commission 

declines to add the word ‘‘mandatory’’ 

into the definition of ‘‘ancillary good or 

service.’’ 

Some commenters also asked the 

Commission for additional guidance as 

to when a good or service might be 

considered ancillary, particularly if a 

good or service includes variable 

costs.157 The Commission addresses 

pricing scenarios, including those 

pertaining to contingent or variable fees, 

in section III.B.1.a. Another commenter 

stated that the use of the word ancillary 

was unclear, because it ‘‘implies a 

relationship between a primary object 

and the ancillary object’’ and does not 

include guidance concerning the 

primary object.158 The Commission 

cannot identify in every possible 

situation which good or service would 

be the ‘‘primary object’’ versus an 

ancillary good or service because such 

a determination is fact-specific and will 

depend on the goods or services offered 

by individual businesses. 

For the foregoing reasons, and based 

on its review of the comments received, 

the Commission adopts the definition of 

‘‘ancillary good or service’’ set forth in 

the NPRM. As discussed in section 

III.A.8, to address comments and clarify 

the rule, the Commission modifies the 

definition of total price to further clarify 

that under final § 464.2(a), Businesses 

may exclude from total price fees or 

charges for any optional ancillary good 

or service. 

2. Business 

Proposed § 464.1(b) defined 

‘‘business’’ as ‘‘an individual, 

corporation, partnership, association, or 

any other entity that offers goods or 

services, including, but not limited to, 

online, in mobile applications, and in 

physical locations.’’ As part of the 

NPRM, the Commission also proposed a 

carve-out for certain motor vehicle 

dealers required to comply with the 

Combating Auto Retail Scams Trade 

Regulation Rule (‘‘CARS Rule’’),159 and 

for the carve-out to become effective 

upon the CARS Rule’s effective date. 

The CARS Rule provides for certain 

pricing disclosure requirements and 

prohibits misrepresentations. Final 

§ 464.1 adopts the first sentence of the 

proposed definition of ‘‘business,’’ but 

removes the carve-out for motor 

vehicles required to comply with the 

CARS Rule because of the final rule’s 

narrowed scope. 

In the NPRM, the Commission sought 

input as to whether it should modify the 

proposed definition of ‘‘business’’ to 

exclude certain businesses, or whether 

it should add a definition of ‘‘covered 

business’’ to narrow the businesses 

subject to the rule. The NPRM also 

included several questions concerning 

how to define ‘‘covered business’’ in the 

event the Commission opted to adopt 

such a definition. The Commission 

received broad support for an industryneutral rule from individual 

commenters, consumer groups, and 

industry organizations. Commenters 

cited the prevalence of hidden and 

deceptive fees across a variety of 

industries and argued that broad 

exemptions would create an uneven 

economic playing field and confuse 

consumers by creating unpredictability 

across industries.160 Conversely, the 

Commission received numerous 

comments asking that it narrow the rule 

to specific industries, including, for 

example, live-event ticketing and shortterm lodging. Several commenters also 

urged the Commission to exempt certain 

industries, arguing that the rule would 

pose challenges for those industries or 

that those industries are already subject 

to existing regulations. 

Following its review of the comments, 

the Commission narrows application of 

the final rule to covered goods or 

services, those involving live-event 

tickets or short-term lodging. While the 

comments demonstrated that bait-andswitch pricing and misleading fees and 

charges inflict harms on consumers 

across the economy, the rulemaking 

record reveals longstanding concerns 

with these unfair and deceptive 

practices within the live-event ticketing 

and short-term lodging industries in 

particular. The final rule addresses 

these industries first. The Commission 

addresses the definition of ‘‘covered 

good or service’’ in section III.A.4. 

The Commission received comments 

requesting modifications to various 

definitions, including the definition of 

‘‘business,’’ or wholesale exemptions 

from the proposed rule’s coverage 

related to issues in particular industries, 

including auto dealers and service 

providers,161 app-based delivery 

platforms,162 financial services 


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163E.g., FTC–2023–0064–3139 (American 

Bankers Association and Consumer Bankers 

Association); FTC–2023–0064–2893 (America’s 

Credit Unions); FTC–2023–0064–3168 (American 

Financial Services Association); FTC–2023–0064– 

3147 (American Land Title Association); FTC– 

2023–0064–1425 (Iowa Bankers Association); FTC– 

2023–0064–1941 (Independent Bankers Association 

of Texas); FTC–2023–0064–3182 (Massachusetts 

Bankers Association); FTC–2023–0064–3119 

(Money Services Business Association, Inc.); FTC– 

2023–0064–3144 (Mortgage Bankers Association); 

FTC–2023–0064–3127 (U.S. Chamber of 

Commerce). 

164E.g., FTC–2023–0064–3294 (International 

Franchise Association); FTC–2023–0064–3141 

(Coalition of Franchisee Associations); FTC–2023– 

0064–3211 (American Association of Franchisees & 

Dealers). 

165E.g., FTC–2023–0064–3210 (Service 

Corporation International); FTC–2023–0064–3065 

(Carriage Services, Inc.); FTC–2023–0064–3130 

(International Cemetery, Cremation & Funeral 

Association). 

166E.g., FTC–2023–0064–3152 (Building Owners 

& Managers Association et al.); FTC–2023–0064– 

3116 (Manufactured Housing Institute); FTC–2023– 

0064–3133 (National Multifamily Housing Council 

and National Apartment Association); FTC–2023– 

0064–3172 (New Jersey Apartment Association); 

FTC–2023–0064–3289 (Zillow Group). As 

explained in section III.A.4, the Commission does 

not intend to cover rental housing providers in its 

definition of ‘‘Covered Good or Service’’ at this 

time. 

167E.g., FTC–2023–0064–0264 (Individual 

Commenter); FTC–2023–0064–2953 (Individual 

Commenter); FTC–2023–0064–2124 (Individual 

Commenter); FTC–2023–0064–3022 (Individual 

Commenter); FTC–2023–0064–3021 (Individual 

Commenter); FTC–2023–0064–3300 (National 

Restaurant Association); FTC–2023–0064–3219 

(Georgia Restaurant Association); FTC–2023–0064– 

3180 (Independent Restaurant Coalition); FTC– 

2023–0064–3078 (Washington Hospitality 

Association); FTC–2023–0064–3080 (UNITE HERE); 

FTC–2023–0064–2918 (Elite Catering + Event 

Professionals). 

168E.g., FTC–2023–0064–3234 (CTIA—The 

Wireless Association); FTC–2023–0064–3295 

(USTelecom—The Broadband Association); FTC– 

2023–0064–2884 (NTCA—The Rural Broadband 

Association); FTC–2023–0064–3143 (ACA 

Connects). 

169E.g., FTC–2023–0064–2919 (National 

Automatic Merchandising Association). 

170E.g., FTC–2023–0064–3292 (National 

Association of Theatre Owners). 

171E.g., FTC–2023–0064–3269 (IHRSA—The 

Health & Fitness Association). 

172E.g., FTC–2023–0064–2906 (National 

Association of College & University Business 

Officers et al.). 

173E.g., FTC–2023–0064–3249 (Marine Retailers 

Association of the Americas); FTC–2023–0064– 

3251 (National RV Dealers Association). 

174Towing & Recovery Association of America, 

Inc. submitted a late comment, which the 

Commission considered in its discretion and makes 

available at https://www.ftc.gov/system/files/ftc_

gov/pdf/R207011TRAAComment.pdf. 

175FTC–2023–0064–3106 (American Society of 

Travel Advisors). 

176See, e.g., FTC–2023–0064–3293 (Travel 

Technology Association); FTC–2023–0064–3262 

(Skyscanner). 

177FTC–2023–0064–3120 (Arizona Indian 

Gaming Association). 

178 Id. 

179See Fed. Power Comm’n v. Tuscarora Indian 

Nation, 362 U.S. 99, 116–17 (1960) (examining case 

law supporting the conclusion that ‘‘a general 

statute in terms applying to all persons includes 

Indians and their property interests’’); FTC v. AMG 

Servs., Inc., No. 2:12–CV–00536–GMN, 2013 WL 

7870795, at * 16–21 (D. Nev. July 16, 2013), R. & 

R. adopted, 2014 WL 910302 (D. Nev. Mar. 7, 2014) 

(discussing the FTC Act’s applicability to Federally 

recognized Tribes and Tribal businesses). 

180See, e.g., AMG Servs., 2013 WL 7870795, at 

* 22–23 (holding there was a genuine dispute of 

material fact barring summary judgment on 

question of whether Tribal chartered corporations 

were for-profit corporations under the FTC Act). 

providers,163 franchised businesses,164

funeral service providers,165 rental 

housing,166 restaurants and other food 

and beverage service providers,167

telecommunications providers,168

vending machine retailers,169 movie 

theaters,170 health and fitness 

centers,171 higher education 

institutions,172 recreational vehicles and 

marine crafts,173 and towing 

companies.174 The Commission’s 

decision to narrow the final rule to 

covered goods or services renders these 

requests inapplicable, and as such, the 

Commission does not address them at 

this time. 

The Commission received comments 

from various third-party travel service 

providers, including online travel 

agencies and travel advisors, arguing 

that third-party travel intermediaries 

and advisors are situated differently 

from underlying travel service providers 

and may be subject to existing 

Department of Transportation (‘‘DOT’’) 

regulations. Online travel agencies and 

travel advisors routinely offer, display, 

or advertise prices of covered goods or 

services to consumers, including 

businesses, which is conduct covered by 

the final rule. One industry group 

representing travel advisors argued that 

travel advisors do not set the price of 

underlying travel products and rely on 

the sellers of such products to provide 

accurate pricing information.175 The 

commenter requested that the 

Commission include a ‘‘safe harbor 

mechanism’’ to protect travel advisors 

who may rely on inaccurate pricing 

information provided by sellers. The 

Commission declines to exclude travel 

advisors from the rule or to provide 

them with a safe harbor. The 

Commission addresses in section 

III.B.1.f requests for immunity for thirdparty intermediaries. 

The Commission also received 

comments from online travel agencies 

seeking an exemption from the rule for 

airfare or bundled products that include 

airfare, arguing that the FTC Act does 

not confer jurisdiction over airlines and, 

further, that DOT’s Full Fare 

Advertising Rule requires certain 

pricing disclosures for airfare.176 As 

noted in the NPRM, the Commission’s 

enforcement of its rule is subject to all 

existing limitations of the law and the 

Commission cannot bring a complaint to 

enforce its rule if doing so would exceed 

the Commission’s jurisdiction or 

constitutional limitations. The 

Commission declines to exempt online 

travel agencies from the rule. However, 

the Commission notes that, where there 

is overlap between this rule and the 

DOT’s Full Fare Advertising Rule on the 

treatment of government charges (i.e., in 

the context of bundled travel packages, 

such as for airfare and hotels, the Full 

Fare Advertising Rule requires the 

inclusion of government taxes and fees 

in the total price), complying with both 

rules is feasible. While this rule permits 

businesses to exclude government 

charges from total price, it does not 

require them to do so. 

The Commission received a comment 

from a gaming association seeking an 

exemption for Federally recognized 

Indian Tribes and Tribal entities as 

governments that act for the benefit of 

their tribal citizens.177 The commenter 

asserted that the Commission does not 

generally exercise regulatory authority 

over such entities. The comment 

focused on Tribal government casinos 

and explained that Tribal casino 

revenues are used for essential Tribal 

government services and community 

development, including education, 

healthcare services, housing, and 

infrastructure development.178

The Commission recognizes that some 

Tribal Government casinos and other 

businesses may operate as hotels or liveevent venues, or may otherwise offer 

goods or services that fit within the 

definition of covered good or service. 

Nevertheless, the Commission declines 

to exempt Federally recognized Indian 

Tribes and Tribal entities from coverage 

under the final rule. The FTC Act is a 

law of general applicability that applies 

to such entities, as well as individual 

members thereof.179 The Commission 

recognizes that, in some instances, these 

entities may be organized in such a way 

that they are outside FTC jurisdiction, 

but whether a given Tribe or Tribal 

business is a corporation within the 

scope of the FTC Act is a fact-dependent 

inquiry.180 The Commission is not 

aware of any evidence to suggest that 

the final rule would disproportionately 

impact such entities or that it would 

have any impact on their ability to 

continue to use revenues for 

government services or community 

development. 

The Commission received a comment 

seeking an exemption for all franchised 

businesses. The commenter raised 

concerns that franchised businesses may 

lose out on the benefit of national 


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181FTC–2023–0064–3294 (International 

Franchise Association). 

182 Id. 

183 Id. 

184FTC–2023–0064–3141 (Coalition of 

Franchisee Associations); FTC–2023–0064–3211 

(American Association of Franchisees & Dealers). 

185 16 CFR 436.5; see also Fed. Trade Comm’n, 

Staff Guidance on the Unlawfulness of Undisclosed 

Fees Imposed on Franchisees (July 2024), https://

www.ftc.gov/system/files?file=ftc_gov/pdf/ 

Franchise-Staff-Guidance.pdf. 

186FTC–2023–0064–3189 (National Automobile 

Dealers Association). 

187FTC–2023–0064–3294 (International 

Franchise Association). 

188See Promulgation of Trade Regulation Rule 

and Statement of Basis and Purpose: Rule 

Concerning Recurring Subscriptions and Other 

Negative Option Programs, 89 FR 90476 (Nov. 15, 

2024), https://www.federalregister.gov/documents/ 

2024/11/15/2024-25534/negative-option-rule 

(amending 16 CFR 425.4); 16 CFR part 465; 

Promulgation of Trade Regulation Rule and 

Statement of Basis and Purpose: Rule on the Use of 

Consumer Reviews and Testimonials, 89 FR 68034 

(Oct. 22, 2024), https://www.federalregister.gov/ 

documents/2024/08/22/2024-18519/traderegulation-rule-on-the-use-of-consumer-reviewsand-testimonials; Guides Concerning Use of 

Endorsements and Testimonials in Advertising, 16 

CFR 255.0(f). The Commission notes that it declines 

to adopt every modification adopted in the finalized 

Rule on the Use of Consumer Reviews and 

Testimonials, based on the goals of each rule and 

the comment record. 

189See Deception Policy Statement, 103 F.T.C. at 

175, 177–82; Unfairness Policy Statement, 104 

F.T.C. at 1073; and other sources cited supra notes 

151–52. 

advertising campaigns, asserting that 

‘‘[u]nder the Proposed Rule, national 

marketing campaigns are only workable 

if all franchised businesses in a 

franchise system adhere to the same 

pricing regime (including pass-through 

fees), regardless of the economic 

demands of the market in which they 

operate.’’ 181 The commenter also raised 

concerns particular to restaurant 

franchises.182

The Commission declines to exclude 

franchised businesses from the final 

rule. As the commenter notes, 

franchised businesses include hotels, 

restaurants, and fitness centers, among 

other businesses. The Commission’s 

addition of the ‘‘covered good or 

service’’ definition narrows the rule’s 

application to businesses that make 

available live-event tickets or short-term 

lodging and moots the commenter’s 

concerns regarding restaurants or other 

franchises. Further, the final rule 

applies equally to franchised and nonfranchised businesses, including hotels. 

The commenter has not provided any 

evidence to suggest that the rule will 

disproportionately impact franchised 

businesses. As to the commenter’s 

contention that application of the rule 

will negatively impact franchised 

businesses’ ability to benefit from 

national advertising campaigns, the 

Commission addresses commenters’ 

questions and concerns about national 

advertising campaigns in section 

III.B.1.d. 

The commenter also urged the 

Commission to exclude from the rule 

sellers of franchises (‘‘franchisors’’) 

subject to the FTC’s Disclosure 

Requirements and Prohibitions 

Concerning Franchising Rule 

(‘‘Franchise Rule’’), arguing that the 

rule’s total price requirement would 

undermine the Franchise Rule’s 

requirement to itemize specific fees.183

Two commenters representing 

franchised businesses (‘‘franchisees’’), 

however, urged the Commission to 

address ‘‘the types of fees that are 

charged to franchisees by franchisors,’’ 

which are not subject to the Franchise 

Rule.184

The Franchise Rule, 16 CFR part 436, 

requires franchisors, in connection with 

the offer or sale of a franchise, to 

provide prospective franchisees with 

specific information about the fees and 

charges necessary to begin operation of 

the franchised business, including the 

estimated initial investment, expected 

fees, and other expenses.185 Because the 

final rule is limited to prices for covered 

goods or services and ancillary goods or 

services offered as part of the same 

transaction, it would not apply to an 

offer or sale of a franchise, including a 

hotel franchise. However, the 

Commission reiterates that franchised 

businesses must comply with the final 

rule in its entirety when selling covered 

goods or services. 

One industry group recommended 

that the definition of ‘‘business’’ be 

limited to ‘‘an individual, corporation, 

partnership, association, or any other 

entity that offers goods or services to 

consumers,’’ with the purpose of 

exempting business-to-business 

transactions from the scope of the final 

rule.186 Another industry group 

similarly requested that the Commission 

exempt business-to-business 

transactions from the scope of the final 

rule.187 As set forth in section III.B.1.f, 

the Commission believes that 

application of the rule to business-tobusiness transactions is appropriate and 

necessary to provide the Commission 

with the tools necessary to seek redress 

from businesses that violate the law. 

The final rule covers both business-toconsumer transactions and business-tobusiness transactions, so no 

modification to the definition of 

‘‘business’’ is required. 

3. Clear(ly) and Conspicuous(ly) 

Proposed § 464.1(c) in the NPRM 

defined ‘‘clear(ly) and conspicuous(ly),’’ 

consistent with longstanding FTC 

practice, as ‘‘a required disclosure that 

is difficult to miss (i.e., easily 

noticeable) and easily understandable,’’ 

and listed proposed specifications for 

‘‘visual disclosure[s],’’ ‘‘audible 

disclosure[s],’’ and ‘‘any communication 

using an interactive electronic 

medium.’’ Among other specifications, 

the definition explained that the 

disclosure ‘‘must be made through the 

same means through which the 

communication is presented.’’ The 

proposed definition also provided that 

disclosures ‘‘must use diction and 

syntax understandable to ordinary 

consumers and must appear in each 

language in which the representation 

that requires disclosure appears’’ and 

‘‘must not be contradicted or mitigated 

by, or inconsistent with, anything else 

in the communication.’’ The proposed 

definition further made clear that for 

‘‘representations or sales practice[s]’’ 

targeting specific audiences, ‘‘such as 

children, older adults, or the terminally 

ill, ‘ordinary consumers’ includes 

reasonable members of that group.’’ The 

Commission finalizes the definition of 

‘‘clear(ly) and conspicuous(ly)’’ 

proposed in § 464.1(c) with minor 

clarifications to harmonize the language 

and terminology used in this provision 

with the terminology used in recent 

rulemakings and agency guidance. 

Specifically, proposed § 464.1(c) 

provided that a required disclosure 

must be ‘‘difficult to miss (i.e., easily 

noticeable).’’ Final § 464.1 reverses the 

order of the phrases ‘‘easily noticeable’’ 

and ‘‘difficult to miss,’’ and, thus, 

provides that a required disclosure must 

be ‘‘easily noticeable (i.e., difficult to 

miss).’’ Additionally, in final § 464.1, 

the Commission adds language to clarify 

that required disclosures must be 

‘‘easily understandable by ordinary 

consumers.’’ In final § 464.1, the 

Commission deletes reference to 

‘‘reasonable’’ members of a specifically 

targeted group. Each of these 

modifications is to comport with the 

Commission’s recently finalized Trade 

Regulation Rule on the Use of Consumer 

Reviews and Testimonials and the 

Negative Option Rule, as well as the 

Commission’s Endorsement Guides.188

Moreover, as noted in section II.B., the 

Commission examines conduct from the 

perspective of a consumer acting 

reasonably under the circumstances, 

and if a representation or practice 

affects or is directed primarily to a 

particular group, the Commission 

examines reasonableness from the 

perspective of an ordinary member of 

that group.189 In final § 464.1, the 

Commission also includes ‘‘mobile 


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190FTC–2023–0064–3160 (Consumer Federation 

of America et al.). 

191 Id. 

192 Id. 

193FTC–2023–0064–3206 (Motor Vehicle 

Protection Products Association et al.). 194FTC–2023–0064–1425 (Iowa Bankers 

Association). 195FTC–2023–0064–3145 (Association of 

National Advertisers, Inc.). 

196 Id. 

197FTC–2023–0064–3263 (Flex Association). 

198See Fed. Trade Comm’n, Bureau of Consumer 

Protection Business Guidance, .com Disclosures: 

How to Make Effective Disclosures in Digital 

Advertising 7, 18 (Mar. 2013), https://www.ftc.gov/ 

system/files/documents/plain-language/bus41-dotcom-disclosures-information-about-onlineadvertising.pdf. 

199NPRM, 88 FR 77481, Question 14. 

applications’’ within the definition of 

‘‘clear(ly) and conspicuous(ly).’’ This 

addition clarifies that ‘‘mobile 

applications’’ constitute interactive 

media devices under item (4) of the 

definition. The Commission does not 

believe that these modifications 

substantively alter the definition of 

‘‘clear(ly) and conspicuous(ly).’’ 

The Commission declines to adopt 

several modifications to the definition 

of ‘‘clear(ly) and conspicuous(ly)’’ 

proposed by a consumer group. First, 

the commenter suggested that the 

Commission add ‘‘limited English 

proficient consumers’’ to the list of 

specific audience-types that a 

representation or sales practices may 

target in proposed § 464.1(c)(8) to make 

clear that disclosures are 

understandable for both English and 

limited-English speakers.190 The 

Commission does not believe such a 

modification is necessary. While the 

definition includes examples of specific 

audiences who may be targeted by 

particular sales practices or 

representations, the use of ‘‘such as’’ is 

intended to make clear these are 

examples, rather than an exhaustive list 

of categories of consumers who may be 

targeted. The Commission further notes 

that final § 464.1 requires that the 

disclosures ‘‘must appear in each 

language in which the representation 

that requires the disclosure appears.’’ 

The commenter also suggested that 

the Commission add language to require 

that disclosures on interactive electronic 

media ‘‘be capable of being printed and 

saved in an easily readable format.’’ 191

The Commission does not believe such 

a modification is necessary. The 

definition considers the various types of 

media through which consumers and 

businesses transact and, for all types of 

media, the definition requires the 

disclosures to be ‘‘easily noticeable (i.e., 

difficult to miss).’’ Thus, the 

Commission believes that the definition 

provides businesses with flexibility to 

continue transacting effectively and 

efficiently through different media, 

while ensuring sufficient consumer 

understanding of required disclosures. 

The commenter further proposed that 

the rule clarify that disclosures must be 

concise to discourage businesses from 

‘‘listing hundreds of optional fees, 

identifying fees that would not be 

applicable to the consumer, providing a 

description that uses complex jargon, 

[or is] unnecessarily lengthy.’’ 192 The 

definition already addresses these 

concerns by setting forth what ‘‘clear(ly) 

and conspicuous(ly)’’ means: using 

simple terms that provide sufficient 

information about how businesses can 

formulate disclosures that are easily 

understandable and noticeable to 

consumers. The definition provides that 

disclosures ‘‘must stand out from any 

accompanying text or other visual 

elements’’ to be ‘‘easily noticed, read, 

and understood.’’ 

An automobile industry group urged 

the Commission to remove ‘‘required 

disclosure’’ from the definition of 

‘‘clear(ly) and conspicuous(ly),’’ arguing 

that ‘‘the NPRM is silent on what those 

required disclosures actually are.’’ 193

The Commission disagrees and notes 

that the final rule modifies § 464.2(a) 

through (c) to provide greater clarity 

concerning what needs to be disclosed, 

including total price and other 

information related to fees or charges 

that were excluded from total price, and 

the nature, timing, and prominence of 

those disclosures. Those modifications 

are discussed in detail in section III.B. 

One commenter on behalf of members 

in the financial services industry 

asserted that the definition of ‘‘clear(ly) 

and conspicuous(ly)’’ may conflict with 

requirements of certain financial 

services regulations, which do not 

generally require a certain text size or 

placement, but do require that certain 

disclosures be made with ‘‘equal 

prominence and in close proximity to 

certain trigger terms.’’ 194 The 

Commission does not believe that 

financial services regulations are 

implicated by the final rule’s more 

narrow application to covered goods or 

services. Nonetheless, the Commission 

notes that the definition does not 

require a particular text size or 

placement; the definition states that 

‘‘clear(ly) and conspicuous(ly)’’ requires 

a visual disclosure to ‘‘stand out from 

any accompanying text or other visual 

elements so that it is easily noticed, 

read, and understood.’’ 

A commenter on behalf of marketing 

and advertising businesses criticized the 

proposed definition of ‘‘clear(ly) and 

conspicuous(ly)’’ as imposing 

‘‘prescriptive visual and audio 

disclosure[s] . . . that may not cleanly 

map onto all advertising mediums’’ and 

argued that a business’s compliance 

obligations may not be clear if the 

business relies on advertising mediums 

not mentioned in the definition.195 The 

commenter urged the Commission to 

allow for sufficient flexibility ‘‘to better 

accommodate current and future 

advertising mediums that may not allow 

for the contemplated disclosures,’’ in 

particular to make it easier for small 

businesses to comply with the rule.196

The commenter did not provide any 

examples of advertising media that 

would make it difficult to comply with 

the rule and did not suggest alternative 

language. Similarly, a commenter 

representing app-based delivery 

platforms noted the limited space for 

disclosures on delivery platforms and 

asserted that the rule lacked clarity as to 

how such platforms should comply.197

The Commission believes that the 

definition of ‘‘clear(ly) and 

conspicuous(ly)’’ provides basic, 

common-sense, and flexible principles 

to address current and future 

advertising media. For example, the 

definition requires that visual 

disclosures be in a size and font that 

consumers will easily notice and not be 

obscured by other text and that audible 

disclosures be at a volume, speed, and 

cadence that consumers will easily 

understand. In keeping with 

longstanding Commission interpretation 

and guidance, the definition does not 

mandate specific fonts, text-size, or 

volume, or otherwise impose a one-sizefits-all approach. Instead, it provides 

substantial flexibility to businesses in 

meeting the rule’s disclosure 

requirements so long as consumers take 

away an accurate understanding of the 

disclosure. The Commission has 

published multiple resources to assist 

businesses in ensuring that disclosures 

are clear and conspicuous, including a 

guide specifically geared toward digital 

and mobile advertising.198

4. Covered Good or Service 

In the NPRM, the Commission 

solicited comment on whether it should 

narrow the businesses covered by the 

rule to particular industries or to 

covered businesses, and if so, how to 

define covered businesses.199 The final 

rule includes a definition for ‘‘covered 

good or service’’ to include: (1) Liveevent tickets; or (2) Short-term lodging, 

including temporary sleeping 

accommodations at a hotel, motel, inn, 

short-term rental, vacation rental or 

other place of lodging. Under § 464.2(a), 


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200FTC–2023–0064–2887 (Progressive Policy 

Institute). 

201FTC–2023–0064–1519 (NYC Consumer and 

Worker Protection argued that ‘‘[c]onsumers 

deserve every business to be transparent and fair 

about prices.’’); FTC–2023–0064 (Berkeley Law 

stated that ‘‘[r]estricting the Rule to particular 

industries would exclude some of the most critical 

sectors that low-income people especially rely on,’’ 

including ‘‘the rental housing market, tax 

preparation services, payday lenders, and gift card 

merchants’’); FTC–2023–0064–3282 (NCLC 

highlighted hidden or deceptive fees in ‘‘businesses 

that offer credit, lease, or savings products’’) 

202See, e.g., FTC–2023–0064–3160 (Consumer 

Federation of America et al.); FTC–2023–0064–3270 

(Consumer Federation of America, National 

Consumer Law Center, National Association of 

Consumer Advocates); see also FTC–2023–0064– 

2853 (Performance Auto Inc., an individual car 

dealership, supported application of the rule to car 

dealers.). 

203See, e.g., FTC–2023–0064–1939 (Tzedek DC). 

204See, e.g., FTC–2023–0064–3160 (Consumer 

Federation of America et al.); FTC–2023–0064–3275 

(Berkeley Center for Consumer Law & Economic 

Justice et al.); see also FTC–2023–0064–0199 (‘‘I 

don’t understand why I have to pay to have my 

credit card bill mailed to me . . . .’’); FTC–2023– 

0064–0258 (‘‘I checked our account and discovered 

that they had charged $10.00 for maintenance 

fees.’’); FTC–2023–0064–0418 (‘‘Even credit unions 

are charging insane fees it is bleeding us dry if we 

are broke already why are we getting hit with fees 

for being poor’’); FTC–2023–0064–0396 (‘‘My son is 

on SSI, and his bank charges him fees when his 

account goes below $100! . . . How does this make 

sense? Banks should not have fees like this. It [is] 

penalizing the poorest people!’’); FTC–2023–0064– 

0425 (‘‘What bothers me is that my bank charges me 

$35 for every overdraft!! I find that excessive! It’s 

a lot of money, especially when you don’t have 

enough in the first place. It’s like being punished 

for being poor.’’); FTC–2023–0064–0762 (‘‘We have 

and continue to pay unnecessary costs for services 

especially personal loans and credit card debt. This 

makes payments for these loans much more of a 

hardship than the initial being in need of the card 

or loans was in the first place.’’). 

205See, e.g., FTC–2023–0064–3248 (DC Jobs With 

Justice on behalf of Fair Price, Fair Wage Coalition 

encouraged the Commission to maintain an 

industry-neutral rule applicable to the restaurant 

industry); FTC–2023–0064–2885 (AARP 

commented that many consumers ‘‘feel deceived 

when faced with an unexpected mandatory charge,’’ 

such as ‘‘service fees,’’ ‘‘living wage fees,’’ or 

‘‘kitchen fees,’’ and ‘‘would prefer these costs be 

incorporated into the price of food so that they 

better understand restaurants’ costs upfront.’’); 

FTC–2023–0064–0103 (Individual Commenter 

stated: ‘‘[R]estaurants are adding surcharges [for] 

providing health insurance, or to make sure that 

kitchen crew receives a tip. But these are existing 

operating costs that can and should be factored into 

the price. . . . On at least a couple occasions, the 

add-on fee wasn’t even disclosed until the check.’’); 

FTC–2023–0064–0119 (Individual Commenter 

stated: ‘‘Fees of approximately 5–20% are often 

added to restaurant bills. . . . They are often 

written in small font in inconspicuous places on the 

menu or past blank space on websites. It’s often 

unclear where these additional fees are going and 

should be simply incorporated into the menu 

prices.’’); FTC–2023–0064–0120 (Individual 

Commenter stated: ‘‘Now restaurants are adding 

service fees instead of increasing food price. I want 

to buy goods and services, I want to know the full 

price, with all the extra fees and taxes before, not 

after selecting a goods or service.’’); FTC–2023– 

0064–0152) (Individual Commenter stated: 

‘‘Tipping since covid is crazy now too—and now 

these add on fees appear to be creeping into 

restaurants. A local pizza restaurant added a 20% 

‘gratuity fee’ on the bill—this was not a tip but an 

additional charge for ‘business costs’ and does not 

go to employees.’’); FTC–2023–0064–0065 

(Individual Commenter stated: ‘‘A number of 

restaurants here in Chicago are now adding 

surcharges that are only disclosed after you get the 

check, or they are disclosed in small print on the 

menu, which effectively makes the prices displayed 

on the menu deceptive.’’); FTC–2023–0064–0052 

(Individual Commenter stated: ‘‘Small businesses, 

particularly restaurants, have grown their use of the 

type of non-transparent pricing practices that this 

rule aims to address . . ., such as the inclusion in 

bills of various fees that cannot be avoided (and that 

therefore should be part of the total price)’’). 

206See, e.g., FTC–2026–0064–1303 (Individual 

Commenter stated: ‘‘Just last night I tried to buy 

movie tickets (from the movie theater’s own app no 

less!) but the fees added 25% more to the cost of 

the ticket! Ten dollars in fees on an app that the 

big movie chain runs on its own!’’); FTC–2023– 

0064–1469 (Individual Commenter stated: ‘‘I’m sick 

of paying for ‘convenience fees’ when purchasing 

tickets online (to live events and even the local 

movie theater), even though there is no other way 

to purchase them.’’); see also FTC–2023–0064–3104 

(Truth in Advertising, Inc.) (highlighting class 

action lawsuits alleging failure to disclose the total 

cost of movie ticket prices, inclusive of fees, in 

violation of New York State law). 

207See, e.g., FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice et al.). 

208See, e.g., FTC–2023–0064–3191 (Community 

Catalyst et al.). 

209FTC–2023–0064–2888 (Housing Policy Clinic, 

University of Texas School of Law stated, ‘‘it is 

essential for the rule to cover the rental housing 

industry in order to mitigate the harmful impacts 

of unfair and deceptive fees on renters.’’); FTC– 

2023–0064–2858 (U.S. House of Representatives, 

Rep. Maxwell Alejandro Frost, Rep. Jimmy Gomez, 

Rep. Barbara Lee, Rep. Rashida Tlaib, Rep. Kevin 

Mullin, Rep. Dwight Evans, Rep. Judy Chu, Rep. 

Greg Casar, Rep. Dan Goldman, and Rep. Salud 

Carbajal encouraged an industry-neutral rule but 

urged the Commission at minimum to include liveevent ticketing, short-term lodging, and the rental 

housing industries in the final rule.); FTC–2023– 

0064–3275 (Berkeley Center for Consumer Law & 

Economic Justice et al. commented that: 

‘‘Exempting landlords from the Rule as other 

commenters have proposed would deprive the 

Commission of a critical tool to challenge purveyors 

of junk fees charged in connection with a basic 

necessity of life, one that is disproportionately 

relevant to low-income consumers.’’). 

210See, e.g., FTC–2023–0064–3218 (National 

Consumer Law Center collected consumer 

comments highlighting: ‘‘a ‘technology fee’ 

addendum that adds 1% fee of total rent on top of 

rental cost’’; ‘‘an extra $255 in mandatory fees, for 

services I don’t even want’’; and ‘‘water, sewer, and 

garbage fees would be charged over and above the 

base rent we agreed to . . . [that] could add as 

much as $250 extra per month to our rent.’’); FTC– 

2023–0064–3271 (U.S. Senator Amy Klobuchar 

commented discussing a hearing conducted 

concerning rental housing competition and noting 

that: ‘‘[R]enters are often hit with numerous junk 

fees that are only disclosed to them when signing 

a lease—frequently after the renter has already 

given notice to end a prior lease. . . . As a result, 

renters struggle to meaningfully compare the cost of 

various housing options.’’); FTC–2023–0064–2888 

(Housing Policy Clinic, University of Texas School 

of Law commented: ‘‘This lack of transparency robs 

tenants of their opportunity to fairly participate in 

comparison shopping in the rental housing market 

and can seriously disrupt their financial well-being 

and housing stability.’’); FTC–2023–0064–3218 

(National Consumer Law Center commented: ‘‘With 

respect to the rental housing market, the proposed 

rule would benefit consumers and competition. By 

requiring disclosure of the actual cost of an 

apartment, the rule would help renters to 

comparison shop and enable them to find housing 

that fits their budget.’’); FTC–2023–0064–3225 (CED 

Law described undisclosed fees experienced by its 

clients and stated: ‘‘Up front disclosure of all 

mandatory fees and accurate representation of all 

fees charged would go a long way towards ensuring 

low income renters like those we represent in 

Colorado understand what their monthly housing 

Continued 

the final rule requires businesses that 

offer, display, or advertise any price of 

a covered good or service to clearly and 

conspicuously disclose the total price. 

In addition, § 464.3 of the final rule 

prohibits businesses that offer, display, 

or advertise a covered good or service 

from misrepresenting any fees or 

charges. 

The Commission received comments 

encouraging it to adopt an industryneutral rule and urging it not to limit 

the rule’s application to particular 

industries, as well as comments 

conversely urging it to limit the rule to 

live-event ticketing and short-term 

lodging industries. One advocacy group 

argued that narrowing application of the 

final rule to a subset of industries would 

‘‘create an unlevel playing field’’ and 

alter competitive incentives.200 Other 

commenters argued that hidden or 

deceptive fees are present across 

industries and often impact vulnerable 

populations.201 Several commenters did 

not specifically address the 

Commission’s question regarding 

whether to add a definition of ‘‘covered 

business’’ or how to define ‘‘covered 

business,’’ but instead submitted 

comments highlighting unfair and 

deceptive pricing practices in certain 

industries, and encouraging the 

Commission to adopt a final rule 

applicable to those industries. Those 

included comments concerning the 

motor vehicle industry; 202 delivery 

applications; 203 the financial services 

industry; 204 the restaurant industry; 205

the movie theater industry; 206 tax 

preparation services; 207 and the health 

care industry.208

Several commenters specifically 

urged the Commission to ensure that the 

rental housing industry would be 

subject to the final rule, including in 

any definition of ‘‘covered business,’’ to 

mitigate unfair or deceptive fees 

imposed on renters.209 The Commission 

also received numerous comments from 

individual consumers, consumer and 

policy organizations, elected officials, 

legal service providers, and housing 

advocates highlighting unfair and 

deceptive fees in the rental housing 

industry.210 Conversely, advocates from 


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expenses will be before being locked into a lease 

agreement.’’); FTC–2023–0064–0146 (Individual 

Commenter stated they pay fees including for trash, 

electricity, and ‘‘some other junk fees’’ and argued 

that rental providers ‘‘should be forced to disclose 

all fees before lease signing and never be able to add 

fees after the lease has been signed.’’); FTC–2023– 

0064–0157 (Individual Commenter highlighted 

mandatory added fees and charges not disclosed in 

listed rental prices and stated: ‘‘Landlords should 

not be allowed to force tenants into paying these 

fees with no opt out or if the fees are allowed, then 

the landlord must add that to the total monthly rent 

in advertisements so prospective tenants have an 

accurate scope of what the real monthly costs are.’’); 

FTC–2023–0064–0229 (Individual Commenter 

described an apartment company with fees: 

‘‘[I]ncluding a $20 mos. fee for package delivery. It’s 

a mandatory add-on. Many people do not get 

packages. Including myself.’’); FTC–2023–0064– 

0923 (Individual Commenter stated their rental 

‘‘requires a number of fixed, non-negotiable 

mandatory fees. . . . In my opinion, these fees 

allow the company to advertise a lower monthly 

rental rate, intentionally making it difficult for a 

prospective tenant to comparison shop and 

compare rents from different organizations.’’). 

211See, e.g., FTC–2023–0064–3172 (New Jersey 

Apartment Association supported the rule’s 

inclusion of a definition of Covered Business and 

asked that rental housing providers be excluded 

from the scope of Covered Business); see also FTC– 

2023–0064–3133 (National Multifamily Housing 

Council and National Apartment Association). 

212FTC–2023–0064–3289 (Zillow Group). 

213See, e.g., FTC–2023–0064–3127 (U.S. Chamber 

of Commerce); FTC–2023–0064–2891 (Mary 

Sullivan, George Washington University, Regulatory 

Studies Center); FTC–2023–0064–3233 (NCTA— 

The internet & Television Association); see also 

FTC–2023–0064–3300 (National Restaurant 

Association urged the Commission to exclude small 

restaurants from a definition of ‘‘Covered 

Business’’). 

214FTC–2023–0064–3127 (U.S. Chamber of 

Commerce). 

215FTC–2023–0064–2891 (Mary Sullivan, George 

Washington University, Regulatory Studies Center 

also stated that a rule focused on the short-term 

lodging and live-event ticketing industries would 

‘‘increase the chance of [the rule’s] success’’ and 

provide well-defined limits for those Covered 

Businesses.) 

216See, e.g., FTC–2023–0064–3212 (TickPick, 

LLC stated that it ‘‘supports the Commission using 

its authority under Section 18 of the FTC Act to 

address unfair and deceptive acts or practices 

involving hidden and misleading fees.’’); FTC– 

2023–0064–3266 (StubHub, Inc. commented that it 

‘‘strongly supports efforts to increase price 

transparency for consumers nationwide with the 

federal adoption of all-in pricing.’’); FTC–2023– 

0064–3105 (Charleston Symphony commented: 

‘‘[R]equiring sellers to disclose the total price 

clearly and conspicuously[ ] addresses a pressing 

issue. . . . Predatory practices in the secondary 

ticket sales market pose a significant threat to 

artists, venues, audiences, and the future of 

nonprofit arts organizations, impacting the integrity 

of the ticket-buying process and eroding audience 

confidence.’’); FTC–2023–0064–3122 (Vivid Seats 

stated that it ‘‘supports additional consumer 

disclosures, including all-in pricing,’’ but the rule 

should ‘‘apply equally across all parts of the liveevents ticketing industry,’’ so consumers can 

compare prices and businesses that display total 

prices will not be at a competitive disadvantage.); 

FTC–2023–0064–3241 (National Association of 

Ticket Brokers submitted a comment supporting allin pricing, but noting that it would only work if ‘‘(i) 

it was required of every ticket seller and (ii) there 

was rigorous and expeditious enforcement.’’); FTC– 

2023–0064–3306 (Live Nation Entertainment and its 

subsidiary Ticketmaster North America commented 

that they ‘‘support[ ] a definition of all-in pricing 

that requires the first price for a live-event ticket 

shown to consumers to be the price ultimately 

charged at checkout (exclusive of state and local 

taxes and optional add-ons).’’); see also FTC–2023– 

0064–3264 (Mark J. Perry, Ph.D., Professor Emeritus 

of Economics at University of Michigan-Flint and 

Senior Fellow Emeritus at the American Enterprise 

Institute, ‘‘urge[d] the FTC to ensure that any rule 

requiring all-in pricing in live events apply equally 

to all market participants.’’). The Commission 

addresses other comments and factual scenarios 

raised by commenters concerning live-event 

ticketing, including those concerning ticket service 

fees, in section III.B.1.b. 

217FTC–2023–0064–3212 (TickPick, LLC). 

218FTC–2023–0064–3212 (StubHub). 219FTC–2023–0064–3306 (Live Nation 

Entertainment). 220 Id. 221FTC–2023–0064–3106 (American Society of 

Travel Advisors). 222FTC–2023–0064–3094 (American Hotel & 

Lodging Association). 223FTC–2023–0064–2886 (American Gaming 

Association). As discussed in section II, bait-andswitch pricing, including drip pricing, harms 

consumers even when charges are subsequently 

disclosed. 

the rental housing industry urged the 

Commission to exempt rental housing 

providers from any definition of 

‘‘covered business.’’ 211 A rental housing 

advertising platform urged the 

Commission to adopt a definition of 

‘‘covered business’’ that excludes thirdparty advertising platforms, arguing that 

third-party platforms do not direct 

pricing and ‘‘are not best positioned to 

meet the requirements of the proposed 

rule.’’ 212

On the other hand, the Commission 

also received comments in support of a 

narrow definition of ‘‘covered business’’ 

limited to the live-event ticketing and 

short-term lodging industries, including 

from members of those industries.213

The U.S. Chamber of Commerce 

recommended limiting the definition of 

covered businesses to ‘‘the live-event 

ticketing and/or short-term lodging 

industries,’’ arguing that unique aspects 

of these markets, including a robust 

secondary market for live-event tickets 

and pressures on third-party lodging 

intermediaries ‘‘to advertise the lowest 

price to consumers to optimize search 

outcomes,’’ have shaped FTC research 

on all-in pricing and appropriate 

remedies.214 One academic commenter 

likewise recommended a definition of 

‘‘covered business’’ limited to live-event 

ticketing and short-term lodging, stating 

that these industries have been subject 

to extensive research showing ‘‘their use 

of across-the-board drip pricing to be 

harmful.’’ 215

Commenters from the live-event 

ticketing industry supported a rule 

applicable to their industry, 

emphasizing that a total price 

requirement will aid consumers and 

businesses alike if applied across the 

entire industry.216 For example, 

TickPick, a secondary ticket 

marketplace, commented that it already 

provides consumers with all-in pricing 

and supports ‘‘eliminating drip pricing 

from the live-event ticketing industry,’’ 

arguing that ‘‘widespread use of hidden 

and/or misleading fees harms 

consumers and market competition.’’ 217

StubHub similarly commented that it 

‘‘strongly supports efforts to increase 

price transparency for consumers 

nationwide with the federal adoption of 

all-in pricing’’ in the live-event ticketing 

industry. According to StubHub, in 

2014, it decided to display the all-in 

price to consumers in the hopes of 

encouraging the remainder of the 

industry to follow suit; however, it ‘‘had 

no choice but to revert to its former 

pricing display,’’ which used dripped 

fees, because other platforms continued 

to rely on drip pricing, making 

StubHub’s all-in prices appear higher 

than other platforms.218 Live Nation and 

its subsidiary, Ticketmaster North 

America, likewise expressed concern 

that, absent a nationwide rulemaking to 

implement all-in pricing, ‘‘the current 

market realities present barriers to 

implementing all-in pricing,’’ because 

adopting all-in pricing ‘‘absent a 

mandate creates a first-mover 

disadvantage.’’ 219 Live Nation stated 

that the rule would ‘‘increase pricing 

transparency for fans and support 

competition in the ticketing 

industry.’’ 220

The Commission also received 

support from the representatives of the 

short-term lodging industry for the 

rule’s application to that industry. The 

American Society of Travel Advisors 

commented that ‘‘the rule as proposed 

would greatly benefit consumers of 

hotel and other short-term lodging 

services’’ and applauded the proposed 

rule’s prohibition on misleading fees.221

The American Hotel & Lodging 

Association also expressed support for 

implementation of clear total price 

requirements and encouraged the 

Commission to ‘‘ensure that any final 

rule it promulgates . . . apply broadly 

to all industry participants,’’ including 

intermediaries such as online travel 

agencies, short-term rental platforms, 

and metasearch sites.222 The American 

Gaming Association, a trade group 

representing the casino industry, 

contended that fees are adequately 

disclosed and provide value to 

consumers, but stated that, if applied to 

the lodging industry, the rule should be 

applied ‘‘equitably across the 

industry. . . . including search engines, 

online travel agencies, and other thirdparty vendors.’’ 223


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224See, e.g., FTC–2023–0064–3212 (TickPick, 

LLC); FTC–2023–0064–3106 (American Society of 

Travel Advisors). 

225See, e.g., FTC–2023–0064–2886 (American 

Gaming Association); FTC–2023–0064–3106 

(American Society of Travel Advisors); FTC–2023– 

0064–3266 (StubHub, Inc.); FTC–2023–0064–3264 

(Mark J. Perry, Ph.D., Professor Emeritus of 

Economics at University of Michigan-Flint and 

Senior Fellow Emeritus at the American Enterprise 

Institute); FTC–2023–0064–3162 (BBB National 

Programs, Inc.); FTC–2023–0064–1000 (Individual 

Commenter). 

226NPRM, 88 FR 77481, Question 14(a)(i) 

(proposing to define Businesses in the live-event 

ticketing as ‘‘any Business that makes live-event 

ticketing available, directly or indirectly, to the 

general public’’); Question 14(a)(ii) (proposing to 

define Business in the short-term lodging industry 

as ‘‘any Business that makes temporary sleeping 

accommodations available, directly or indirectly, to 

the general public’’). 

227FTC–2023–0064–3212 (TickPick, LLC). 228FTC–2023–0064–3094 (American Hotel & 

Lodging Association). 229FTC–2023–0064–3296 (Bay Area Apartment 

Association). 

230FTC–2023–0064–3133 (National Multifamily 

Housing Council and National Apartment 

Association). 

231FTC–2023–0064–3290 (U.S. Public Interest 

Research Group Education Fund). 

As described in section II, the 

Commission has determined, in its 

discretion, to focus this final rule on the 

live-event ticketing and short-term 

lodging industries. The Commission 

recognizes that substantial evidence 

exists to support a finding of the 

prevalence of bait-and-switch pricing 

and misleading fees throughout the 

economy; nevertheless, the Commission 

elects to use its rulemaking authority 

incrementally by first combatting these 

unfair and deceptive practices in the 

two industries in which the 

Commission first began evaluating drip 

pricing and that have a history of baitand-switch pricing tactics and 

misleading fees. Indeed, commenters 

representing the live-event ticket and 

short-term lodging industries recognized 

the need for the Commission’s 

rulemaking and generally supported the 

rule’s application to those industries. 

As described in this section, the 

Commission received comments 

supporting a definition of ‘‘covered 

business’’ that is limited to the liveevent ticketing and short-term lodging 

industries.224 The Commission also 

received comments emphasizing the 

need for a level playing field among 

businesses and allowing consumers to 

comparison shop.225 For reasons 

described herein, the final rule applies 

to a defined set of covered goods or 

services, rather than to covered 

businesses. Because some businesses in 

the live-event ticketing and short-term 

lodging industries provide goods or 

services outside of those industries, a 

narrowing of the businesses covered by 

the rule rather than a narrowing of the 

goods or services covered by the rule, 

might unintentionally create an uneven 

playing field. As a result, the 

Commission instead narrows the rule to 

the defined covered goods and services 

of live-event tickets and short-term 

lodging. The Commission notes that the 

rule also applies to ancillary goods or 

services, defined as additional goods or 

services offered to consumers as part of 

the same transaction. 

The NPRM also solicited comment as 

to how to define businesses that offer 

either live-event ticketing or short-term 

lodging, if the final rule were narrowed 

to covered businesses.226 A third-party 

ticketing marketplace commented that it 

‘‘supports inclusion of the live-event 

ticketing industry as a ‘covered 

business’ and is comfortable with the 

proposed definition of ‘businesses in the 

live-event ticketing industry . . . .’ ’’ 227

The final rule’s inclusion of live-event 

tickets in the definition of ‘‘covered 

good or service’’ is consistent with the 

proposed definition of covered business 

in the NPRM. 

With respect to the proposed 

definition of the short-term lodging 

industry, the American Hotel & Lodging 

Association commented that the 

Commission should define short-term 

lodging as: ‘‘a hotel, motel, inn, shortterm rental, or other place of lodging 

that advertises at a price that is a 

nightly, hourly, or weekly rate.’’ 228 One 

commenter representing the rental 

housing industry expressed concern that 

the proposed definition of short-term 

lodging ‘‘could mean different things to 

different people, and that could be 

(mis)applied to rental housing 

industry,’’ including, for example, 

where an apartment community 

provides temporary corporate housing 

subject to the same leasing agreements 

as longer-term tenants or where a 

resident extends a lease agreement for a 

few weeks or months.229 Conversely, 

another commenter representing the 

rental housing industry explained that 

for rental housing, ‘‘the landlord-tenant 

relationship involves an ongoing 

contractual relationship, typically at 

least a year-long commitment.’’ 230

The final rule incorporates portions of 

the American Hotel & Lodging 

Association’s suggested definition of 

short-term lodging and the Commission 

modifies the rule text proposed in the 

NPRM to refer to hotels, motels, inns, 

short-term rentals, vacation rentals, or 

other places of lodging. The 

Commission declines to limit the 

definition of short-term lodging based 

on the advertised payment period or 

length of stay. In some instances, shortterm lodging may include home shares 

and vacation rentals, such as through 

platforms like Airbnb or VRBO, that 

offer short-term rental accommodations 

for durations as long as several months. 

The Commission clarifies that, with the 

addition of a definition for ‘‘covered 

good or service,’’ it does not intend to 

cover rental housing providers at this 

time. When a rental housing provider 

offers a short-term extension on a lease, 

the extension typically would not be 

considered short-term lodging under the 

rule. Similarly, an apartment 

community that offers temporary 

corporate housing subject to the same 

conditions as its long-term leases 

typically would not be considered shortterm lodging under the rule. On the 

other hand, a hotel that offers 

discounted extended stays typically 

would be considered short-term lodging 

under the rule. Whether any particular 

good or service is short-term lodging 

within the rule’s definition of ‘‘covered 

good or service’’ will depend on the 

specific factual circumstances. In 

addition, the Commission may provide 

additional business guidance to address 

nuanced pricing scenarios that may 

arise. 

5. Government Charges 

Proposed § 464.1(d) in the NPRM 

defined ‘‘government charges’’ as ‘‘all 

fees or charges imposed on consumers 

by a Federal, State, or local government 

agency, unit, or department,’’ and 

specified that government charges did 

not encompass fees or charges that the 

government imposes on a business and 

that a business chooses to pass on to 

consumers. The proposed rule 

permitted businesses to exclude 

government charges from total price. 

The Commission received comments 

supporting and critiquing the proposed 

rule’s treatment of government charges. 

Final § 464.1 adopts this provision with 

minor modifications to add ‘‘Tribal’’ 

fees and charges and to clarify that the 

definition of ‘‘government charges’’ 

includes ‘‘the fees or charges imposed 

on the transaction by a Federal, State, 

Tribal, or local government agency, unit, 

or department.’’ 

One consumer group supported the 

NPRM’s exclusion of fees or charges that 

businesses choose to pass onto 

consumers from the definition of 

‘‘government charges’’ (thus requiring 

their inclusion in total price), and 

expressed concern that businesses may 

inflate such fees to pad profits, rather 

than accurately reflect amounts paid in 

fees or charges to the government.231

Two academic commenters similarly 

supported the distinction between fees 


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232FTC–2023–0064–1467 (Richard J. Peltz-Steele, 

Chancellor Professor, University of Massachusetts 

Law School); FTC–2023–0064–1294 (James J. Angel, 

Ph.D., CFP, CFA, Professor, Georgetown University, 

McDonough School of Business). 

233FTC–2023–0064–3126 (Tax Foundation stated: 

‘‘In several states, at least including Alabama, 

Arizona, Hawaii, and New Mexico, and possibly 

California, the state sales tax would not meet the 

Rule’s definition of a government charge, since its 

legal incidence (per statute, regulation, or court 

determination) is on the seller.’’); FTC–2023–0064– 

3258 (National Taxpayers Union Foundation 

commented: ‘‘Arizona, California, Hawaii, and New 

Mexico structure their sales taxes as taxes on the 

business, as measured by its gross receipts.’’). 

234See, e.g., FTC–2023–0064–3127 (U.S. Chamber 

of Commerce); FTC–2023–0064–3258 (National 

Taxpayers Union Foundation stated, ‘‘[n]early all 

states with sales tax prohibit retailers from 

including sales taxes, including taxes collected 

from both suppliers and consumers, in the sales 

price,’’ and cited to states including Alabama, 

Florida, Georgia, Indiana, Maryland, Massachusetts, 

Oklahoma, Pennsylvania, and others.); FTC–2023– 

0064–3126 (Tax Foundation stated, ‘‘many states 

prohibit sales tax-inclusive pricing,’’ highlighting 

Alabama as a State in which the legal incidence of 

sales tax on the seller may ‘‘obligate a vendor, per 

the proposed Rule, to list the sales tax-inclusive 

price if selling to an Alabama resident—which not 

only presupposes advance knowledge of the 

consumer’s location, but forces the vendor to 

disregard Alabama’s requirement that the list price 

not include sales tax.’’). 

235FTC–2023–0064–3258 (National Taxpayers 

Union Foundation). 

236 Id. 

237See, e.g., FTC–2023–0064–3100 (Civitas 

Advisors, Inc.); FTC–2023–0064–3217 (Bowling 

Proprietors’ Association of America); FTC–2023– 

0064–3127 (U.S. Chamber of Commerce); FTC– 

2023–0064–3233 (NCTA—The internet & Television 

Association). 

238FTC–2023–0064–3234 (CTIA—The Wireless 

Association). 

239See, e.g., id.; FTC–2023–0064–3217 (Bowling 

Proprietors’ Association of America); FTC–2023– 

0064–3295 (USTelecom—The Broadband 

Association). 

240FTC–2023–0064–3233 (NCTA—The internet & 

Television Association); FTC–2023–0064–3127 

(U.S. Chamber of Commerce). 

241FTC–2023–0064–3204 (Expedia Group). 

242FTC–2023–0064–3120 (Arizona Indian 

Gaming Association). 

or charges imposed on consumers and 

those that a business chooses to pass 

onto consumers, stating that the latter 

should be incorporated into total price 

to avoid creating a loophole that would 

undermine the rule.232

On the other hand, the Commission 

received several comments expressing 

concern over the NPRM’s definition of 

‘‘government charges’’ as including only 

those charges ‘‘imposed on consumers.’’ 

Two commenters argued that the 

proposed definition failed to consider 

nuances in tax law across States and 

localities. They pointed out, for 

example, that several State laws 

formally impose sales tax on businesses, 

rather than on consumers.233 Under the 

proposed definition, sales tax in those 

States would need to be included in 

total price, while sales tax in other 

States could be excluded from total 

price. These and other commenters also 

noted that many States prohibit the 

inclusion of sales tax in total price, 

which would result in direct conflict 

between the proposed rule and State 

laws that formally impose sales tax on 

businesses.234 Relatedly, one tax policy 

organization noted variation in how 

State laws treat hotel occupancy taxes, 

with most State laws defining hotel 

occupancy taxes as imposed on the 

hotel operator and just six States 

defining hotel occupancy taxes as 

imposed on the consumer. Under the 

proposed definition of ‘‘government 

charges,’’ the commenter stated, hotel 

operators in all but six States would be 

required to include occupancy taxes in 

total price.235 As such, these 

commenters argued that the proposed 

definition is unworkable and noted that 

businesses will spend considerable time 

and resources in understanding the legal 

incidence of Federal, State, and local 

taxes.236

Industry groups also urged the 

Commission to modify the definition of 

‘‘government charges’’ to include 

charges and fees that the government 

expressly permits, and sometimes 

requires, businesses to pass through to 

consumers.237 One commenter noted 

that businesses may be required to 

‘‘unfairly absorb’’ the cost of these 

government charges.238 Commenters 

also expressed concern that 

incorporating pass-through taxes that 

consumers understand and have come 

to expect into total price would obscure 

government fees, resulting in less 

pricing transparency, because 

consumers will not understand that the 

additional costs stem from the 

imposition of government fees.239

Relatedly, two industry groups argued 

that consumers should be made aware 

through transparent pricing that 

additional costs stem from government 

taxes and fees, rather than requiring 

businesses to include them in total 

price.240

After considering the comments, the 

Commission modifies the definition of 

‘‘government charges’’ from those fees 

or charges ‘‘imposed on consumers’’ to 

those ‘‘imposed on the transaction.’’ As 

such, it eliminates the potential 

distinction between fees and charges for 

the transaction a government imposes 

directly on consumers and those 

imposed on businesses. Businesses may 

not exclude from total price fees and 

charges that are wholly distinct from the 

relevant transaction, such as a 

proportional share of a business’s 

income or property taxes, because they 

would not be government charges that 

were ‘‘imposed on the transaction by a 

Federal, State, Tribal, or local 

government agency, unit, or 

department.’’ 

An online travel agency submitted a 

comment identifying concerns about a 

potential conflict between the definition 

of ‘‘government charges’’ and DOT’s 

Full Fare Advertising Rule, 14 CFR 

399.84, which requires tax-inclusive 

pricing for certain travel products, 

including airline tickets and bundled 

vacation packages (e.g., airline tickets 

and hotel stays purchased together).241

Specifically, the commenter asserted 

that the final rule should require that 

hotels and short-term lodging providers 

incorporate government charges into 

total price because, otherwise, 

consumers shopping for bundled 

vacation packages—which are subject to 

the Full Fare Advertising Rule—could 

see different prices from consumers who 

shop separately for flights and lodging. 

The commenter also argued that the rule 

should require that taxes and 

government-imposed fees be included 

in advertised lodging prices, consistent 

with DOT’s Full Fare Advertising Rule. 

The Commission declines to require 

only short-term lodging providers, as 

opposed to live-event ticket sellers and 

other businesses covered by the rule, to 

incorporate government charges into 

total price. However, the Commission 

notes that while the final rule provides 

that businesses ‘‘may’’ exclude 

government charges from total price, 

nothing in the rule prevents businesses 

from advertising prices inclusive of 

those charges, as required by DOT’s Full 

Fare Advertising Rule. 

Finally, an industry group 

representing certain Federally 

recognized Arizona Indian Tribes that 

operate gaming entities urged the 

Commission to include fees or charges 

imposed on consumers by ‘‘tribal’’ 

agencies, units, or departments in the 

definition of ‘‘government charges,’’ to 

recognize taxes or fees that Tribes might 

impose.242 The Commission agrees and 

adds the word ‘‘Tribal’’ to the definition 

of ‘‘government charges’’ to clarify that 

businesses may exclude from total price 

fees or charges imposed on a transaction 

by a Tribal government. 

The Commission notes that the 

modifications in the final rule to the 

definition of ‘‘government charges’’ 

represent a narrowing of the final rule. 

businesses must still make the 

disclosures required by § 464.2(c) in 

connection with government charges 

and are prohibited by § 464.3 from 

misrepresenting the nature, purpose, 


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243FTC–2023–0064–1425 (Iowa Bankers 

Association argued that the definition of ‘‘Pricing 

Information’’ is inappropriate for ‘‘standard bank 

products’’ and products earning interest). 

244FTC–2023–0064–3267 (National Retail 

Federation). 

245 Id.; FTC–2023–0064–2901 (E-Merchants Trade 

Council). 

246FTC–2023–0064–3266 (StubHub, Inc.). 

247 Id. 

248See, e.g., FTC–2023–0064–3263 (Flex 

Association); FTC–2023–0064–3137 (Chamber of 

Progress); FTC–2023–0064–3186 (National LGBT 

Chamber of Commerce and National Asian/Pacific 

Islander American Chamber of Commerce & 

Entrepreneurship); FTC–2023–0064–3238 (Gibson, 

Dunn & Crutcher LLP); FTC–2023–0064–3267 

(National Retail Federation). 

249See, e.g., FTC–2023–0064–3146 (Institute for 

Policy Integrity, New York University School of 

Law); FTC–2023–0064–1294 (James J. Angel, Ph.D., 

CFP, CFA, Professor, Georgetown University, 

McDonough School of Business). 

250FTC–2023–0064–3146 (Institute for Policy 

Integrity, New York University School of Law); 

FTC–2023–0064–1294 (James J. Angel, Ph.D., CFP, 

CFA, Professor, Georgetown University, 

McDonough School of Business); FTC–2023–0064– 

3267 (National Retail Federation). 

amount, or refundability of government 

charges. 

6. Pricing Information 

Proposed § 464.1(e) in the NPRM 

defined ‘‘pricing information’’ as ‘‘any 

information relating to any amount a 

consumer may pay.’’ The final rule 

references pricing information in one 

provision: § 464.2(b). As discussed in 

section III.B.2, final § 464.2(b) is limited 

to covered goods or services and 

requires that, in any offer, display, or 

advertisement that represents any price 

of a covered good or service, a business 

disclose the total price more 

prominently than any other pricing 

information. However, where the final 

amount of payment for the transaction 

is displayed, the final amount of 

payment must be disclosed more 

prominently than, or as prominently as, 

the total price. 

A commenter from the financial 

services industry asserted that the 

proposed definition of ‘‘pricing 

information’’ would be inappropriate for 

‘‘standard bank products, such as 

checking, savings, CDs, consumer loans, 

etc.’’ and failed to address the treatment 

of interest rates for products and 

services governed by existing financial 

regulations.243 The commenter’s 

concerns about the definition of 

‘‘pricing information’’ are inapplicable 

because the final rule, including 

§ 464.2(b), is limited to covered goods or 

services. Accordingly, the final rule 

adopts the proposed definition of 

‘‘pricing information’’ at § 464.1 without 

modification. 

7. Shipping Charges 

Proposed § 464.1(f) in the NPRM 

defined ‘‘shipping charges’’ as ‘‘the fees 

or charges that reasonably reflect the 

amount a business incurs to send 

physical goods to a consumer through 

the mail, including private mail 

services.’’ The NPRM made clear that 

businesses are not permitted to 

artificially inflate the cost of shipping, 

and, instead, shipping charges must 

reasonably reflect the cost incurred to 

send goods to consumers. Final § 464.1 

adopts the proposed definition of 

‘‘shipping charges,’’ with a minor 

modification to clarify that shipping 

charges incurred through private mail 

and shipping services such as FedEx 

and UPS, or by freight, fall within the 

definition. 

One trade association raised 

numerous concerns about the proposed 

definition of ‘‘shipping charges.’’ First, 

the commenter argued that the proposed 

definition fails to consider the 

unpredictability of shipping fees, noting 

that precise costs are difficult for 

retailers to determine because shipping 

costs are frequently based on quotes or 

estimates subject to change based on the 

carrier.244 The commenter noted that 

businesses may face challenges using 

certain shipping methods, including 

consolidating shipment of multiple 

orders or using rail service for partial 

shipment, which it argued can be 

particularly difficult to predict. Second, 

the commenter asked that the 

Commission modify the definition of 

‘‘shipping charges’’ to explicitly permit 

the use of flat rate shipping, explaining 

that many businesses have existing 

agreements with major freight carriers to 

provide flat rate shipping. For example, 

the commenter asked whether the use of 

flat rate shipping charges would be 

considered unlawful if the business 

shipped a small, lightweight item for 

which the actual shipping costs are less 

than the flat rate to ship. Finally, the 

commenter argued that the use of the 

phrase ‘‘reasonably reflect’’ in the 

definition is ambiguous and asked that 

the Commission clarify whether the 

definition includes a scienter 

requirement. Two commenters also 

asserted that the rule would ‘‘force’’ 

businesses to disclose proprietary 

shipping calculations in a threat to free 

market competition.245

The Commission’s use of the phrase 

‘‘reasonably reflect’’ is intended to allow 

for flexibility in determining shipping 

costs. The Commission recognizes that 

precise shipping costs may not be 

knowable until the end of a transaction, 

and, for that reason, the final rule 

permits businesses to exclude shipping 

charges from total price. The rule does 

not require that the cost of shipping 

reflect an exact certainty. Moreover, the 

rule does not require businesses to 

disclose proprietary information 

pertaining to relationships with freight 

or shipping providers because the rule 

does not require that shipping charges 

be excluded from total price; instead, 

the rule permits businesses to exclude 

shipping charges from total price if they 

choose. The final rule does not prohibit 

businesses from incorporating the cost 

of shipping into total price and thereby 

providing shipping to consumers at no 

additional charge. Nor does the final 

rule prohibit the use of flat rate shipping 

or shipping costs based on national 

averages. Instead, the language is 

intended to prevent businesses from 

inappropriately excluding from total 

price costs unrelated to shipping. 

One live-event ticket platform 

supported the proposed rule’s exclusion 

of certain shipping costs from total 

price, noting that the cost to ship 

physical tickets may vary based on 

factors determined later in the 

transaction, such as the location of the 

buyer.246 The commenter also noted 

that a variety of delivery and shipping 

methods may be available to consumers 

purchasing live-event tickets, some of 

which may be mandatory and therefore 

included in total price.247 The 

Commission emphasizes that certain 

fees do not fall within the definition of 

‘‘shipping charges,’’ including online 

‘‘convenience’’ or other fees charged, for 

example, by online ticket agencies to 

electronically ‘‘deliver’’ tickets or other 

processing fees associated with certain 

online purchases. The Commission 

further notes that an online convenience 

or other fee for electronic delivery of a 

ticket should be included in total price 

if a consumer cannot obtain the ticket as 

part of the same transaction (i.e., online) 

without incurring a fee. While the 

Commission received comments raising 

concerns about incorporating the cost of 

delivery, as opposed to shipping, into 

total price,248 the Commission is not 

aware of any evidence that such 

concerns would apply to sales of liveevent tickets or short-term lodging. 

Finally, the Commission also received 

a range of comments regarding handling 

costs. Some commenters urged the 

Commission to amend the definition of 

‘‘shipping charges’’ to clarify that 

internal handling costs do not constitute 

shipping costs and therefore must be 

included in total price.249 The 

comments related to handling costs 

involving goods or services covered by 

the broader proposed rule in the 

NPRM.250 While the Commission has 

not received any evidence that the 


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251Although one commenter expressed concern 

that businesses would use different terms for Total 

Price, and thereby create confusion, the rule does 

not mandate that Businesses use the term Total 

Price. See FTC–2023–0064–3290 (U.S. Public 

Interest Research Group Education Fund). 

252See, e.g., FTC–2023–0064–3133 (National 

Multifamily Housing Council and National 

Apartment Association); FTC–2023–0064–3134 

(U.S. Department of Transportation, Federal Motor 

Carrier Safety Administration); FTC–2023–0064– 

3145 (Association of National Advertisers, Inc.). 

253See, e.g., FTC–2023–0064–2888 (Housing 

Policy Clinic, University of Texas School of Law). 

254See, e.g., FTC–2023–0064–3267 (National 

Retail Federation). 

255See, e.g., FTC–2023–0064–3160 (Consumer 

Federation of America et al.); FTC–2023–0064–3258 

(National Taxpayers Union Foundation); FTC– 

2023–0064–3275 (Berkeley Center for Consumer 

Law & Economic Justice et al.). 

256NPRM, 88 FR 77482, Question 19. 

257See, e.g., FTC–2023–0064–3134 (U.S. 

Department of Transportation, Federal Motor 

Carrier Safety Administration); FTC–2023–0064– 

3160 (Consumer Federation of America et al.); FTC– 

2023–0064–3196 (South Carolina Department of 

Consumer Affairs); FTC–2023–0064–3248 (DC Jobs 

With Justice on behalf of Fair Price, Fair Wage 

Coalition); FTC–2023–0064–3146 (Institute for 

Policy Integrity, New York University School of 

Law). 

258See, e.g., FTC–2023–0064–3233 (NCTA—The 

internet & Television Association); FTC–2023– 

0064–3172 (New Jersey Apartment Association). 

concerns raised in these comments 

would impact covered goods or services, 

the Commission clarifies that internal 

handling costs must be included in total 

price. The Commission does not believe 

that a modification to the ‘‘shipping 

charges’’ definition is necessary, 

however, because the definition 

specifically states that shipping charges 

include only those costs that reasonably 

reflect the cost to ‘‘send physical goods’’ 

to consumers. The Commission does not 

believe that handling charges, like the 

cost to store goods or labor costs 

associated with preparing items for 

shipment, reflect the costs to ‘‘send 

physical goods’’ to consumers. 

Accordingly, handling charges are not 

shipping charges and must be included 

in total price. 

8. Total Price 

Proposed § 464.1(g) in the NPRM 

defined ‘‘total price’’ as ‘‘the maximum 

total of all fees or charges a consumer 

must pay for a good or service and any 

mandatory ancillary good or service, 

except that shipping charges and 

government charges may be excluded.’’ 

Although some commenters stated that 

the proposed definition was not flexible 

enough to account for all pricing 

models, the Commission believes the 

modified definition of ‘‘total price’’ is 

narrowly tailored to protect consumers 

by addressing the identified unfair and 

deceptive practice of hiding costs by 

omitting mandatory fees from advertised 

prices for covered goods or services. 

Consumers must be able to purchase 

and use goods or services at the 

advertised total price. 

Final § 464.1 differs from the 

proposed definition of ‘‘total price’’ 251

to the extent the definitions of 

‘‘government charges’’ and ‘‘shipping 

charges,’’ as discussed in section III at 

A.5 and A.7, are modified. In addition, 

the Commission clarifies in final § 464.1 

that businesses also may exclude from 

total price any fees or charges for 

optional ancillary goods or services. 

Further, the Commission notes herein 

that the rule does not directly address 

concerns that fees imposed in 

connection with covered goods or 

services are ‘‘excessive’’; the rule does 

not cap, ban, or prohibit the charging of 

any fees, but requires certain disclosures 

and prohibits misrepresentations to 

prevent unfair or deceptive pricing 

practices. 

As detailed herein, the Commission 

declines to accept commenters’ 

recommendations to define 

‘‘mandatory,’’ to exclude ancillary goods 

or services from the ‘‘total price’’ 

definition, to modify the ‘‘maximum 

total’’ requirement, or to require the 

inclusion of shipping charges and 

government charges in total price. 

However, the Commission clarifies in 

final § 464.2(c) that businesses must 

disclose the final amount of payment for 

the transaction before a consumer 

consents to pay. 

(a) Mandatory Fees 

Commenters noted that the rule does 

not define ‘‘mandatory,’’ and expressed 

concern about identifying mandatory 

fees to be included in total price.252

Some commenters recommended that 

the Commission clarify the distinction 

between ‘‘core’’ goods and services and 

ancillary goods or services,253 provide 

guidance as to which ancillary goods or 

services are mandatory,254 and modify 

the ‘‘total price’’ definition to exclude 

the reference to mandatory ancillary 

goods or services.255

The Commission has considered these 

comments and declines to accept these 

proposed modifications to the definition 

of ‘‘total price.’’ The definition of ‘‘total 

price’’ specifies that it includes the cost 

of the goods and services being offered 

and any mandatory ancillary goods or 

services, subject to certain exceptions. 

The Commission retains in the 

definition of ‘‘total price’’ fees and 

charges for ‘‘any mandatory ancillary 

good or service’’ as necessary to protect 

consumers from the identified unfair 

and deceptive practice of hidden fees. 

The Commission also declines to 

modify the rule to add a definition of 

‘‘mandatory fees.’’ The Commission 

cannot identify in advance a definitive 

list of mandatory fees because whether 

a particular fee will be mandatory or 

optional will depend on the specific 

facts of an individual business 

transaction, as described in section 

III.A.1. 

Ancillary goods or services can be 

either optional or mandatory depending 

on whether businesses require 

consumers to purchase them or if they 

are necessary to make the principal 

goods or services fit for their intended 

purpose. If businesses offer ancillary 

goods or services and require consumers 

to purchase them to complete 

transactions for or to use the covered 

goods or services being offered, the 

ancillary goods or services are 

mandatory and their cost must be 

included in total price. 

In the NPRM, the Commission sought 

comment on whether it was clear that 

the reference in the definition of ‘‘total 

price’’ to ‘‘all fees or charges a consumer 

must pay for a good or service and any 

mandatory ancillary good or service’’ 

includes (1) all fees or charges that are 

not reasonably avoidable and (2) all fees 

or charges for goods or services that a 

reasonable consumer would expect to be 

included with the purchase.256

Commenters disagreed on whether the 

rule text is clear that ‘‘total price’’ 

includes unavoidable fees and fees 

based on consumer expectations, and 

recommended clarifying the definition 

of ‘‘total price’’ in this regard or adding 

a definition of mandatory fees.257 Other 

commenters argued that the two types of 

fees described are themselves vague and 

unclear.258

Businesses should consider, in the 

context of their specific business 

practices, the Commission’s guidance 

that mandatory fees include charges that 

consumers cannot reasonably avoid and 

charges for goods or services that a 

reasonable consumer would expect to be 

included with the purchase because 

they are necessary to make primary 

goods or services fit for their intended 

purpose. The Commission reiterates the 

guidance about total price that it 

provided in the NPRM: It is well 

established that it is deceptive to offer 

goods or services that are not fit for the 

purpose for which they are sold. By 

offering goods or services, businesses 

impliedly represent that the goods or 

services are fit for their intended 

purpose; reasonable consumers would 

expect that, when they purchase a good 

or service, they will be able to use it for 


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259NPRM, 88 FR 77432. 

260See, e.g., FTC–2023–0064–2891 (Mary 

Sullivan, George Washington University, Regulatory 

Studies Center, noted that ‘‘purely optional’’ 

subscription services, such ‘‘optional features that 

are installed in automobiles, like satellite radio’’ are 

‘‘not deceptive and unfair’’ but are instead efficient. 

She further contended that the proposed rule lacks 

specificity as to these types of ‘‘purely optional’’ 

services.) 

261See, e.g., FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice et al.); 

FTC–2023–0064–3160 (Consumer Federation of 

America et al.); FTC–2023–0064–3248 (DC Jobs 

With Justice on behalf of Fair Price, Fair Wage 

Coalition); FTC–2023–0064–0915 (Individual 

Commenter noted that businesses may misrepresent 

optional fees as mandatory and ‘‘[t]he consumer 

may not realize they are optional when receiving a 

bill and may not realize they can be removed.’’). 

262See discussion infra section III.C and note 349. 

263See, e.g., FTC–2023–0064–3293 (Travel 

Technology Association); FTC–2023–0064–3233 

(NCTA—The internet & Television Association). 

264See, e.g., FTC–2023–0064–3116 

(Manufactured Housing Institute); FTC–2023–0064– 

3172 (New Jersey Apartment Association); FTC– 

2023–0064–3121 (National Independent 

Automobile Dealers Association); FTC–2023–0064– 

1425 (Iowa Bankers Association). 

265See, e.g., FTC–2023–0064–3289 (Zillow Group 

stated that ‘‘rental housing market fees are distinct 

from fees in other economic sectors’’ because they 

are not charged in ‘‘click-to-purchase’’ transactions, 

but involve an ‘‘interactive process’’ over a ‘‘much 

longer period of time’’ and involved ‘‘written 

agreements that include all relevant binding terms 

and conditions, including the total price.’’); FTC– 

2023–0064–3269 (IHRSA—The Health & Fitness 

Association). 

266NPRM, 88 FR 77439. 

267See, e.g., FTC–2023–0064–3162 (BBB National 

Programs, Inc. commented that the definition of 

‘‘Total Price’’ does not specifically address ‘‘how 

advertisers should disclose material limitations to 

obtaining an advertised price.’’); FTC–2023–0064– 

1294 (James J. Angel, Ph.D., CFP, CFA, Professor, 

Georgetown University, McDonough School of 

Business, commented that ‘‘[i]f there are any 

restrictions, they must be as clear and conspicuous 

as the price.’’). 

268See, e.g., supra note 111. 

269See, e.g., FTC–2023–0064–3293 (Travel 

Technology Association ‘‘recommends that any 

final rule refrain from imposing an obligation to 

itemize mandatory fees.’’). 

270See, e.g., FTC–2023–0064–3173 (Center for 

Individual Freedom); FTC–2023–0064–3137 

(Chamber of Progress); FTC–2023–0064–3208 

Continued 

that purpose.259 It is therefore deceptive 

to advertise a total price for a primary 

good or service that does not include 

fees for additional purchases that are 

necessary to render the primary good or 

service fit for its intended purpose. 

Further, businesses cannot treat 

additional purchases that are necessary 

to render covered goods or services fit 

for their intended purpose as optional 

and exclude the costs of these 

additional purchases from total price. 

For example, businesses cannot treat 

credit card surcharges or processing fees 

as optional and exclude them from total 

price if they do not provide consumers 

with other payment options. The rule 

does not require, as some commenters 

suggested, the inclusion of fees for truly 

optional ancillary goods or services in 

total price.260 Nonetheless, such fees 

and their nature, purpose, and amount 

still must be clearly and conspicuously 

disclosed before the consumer consents 

to pay and cannot be misrepresented. 

Commenters expressed the concern 

that businesses could misrepresent 

mandatory fees as optional, for example, 

by including them by default in bills, 

requiring consumers to opt out from 

them, or using other deceptive practices, 

and recommended that the Commission 

include safeguards in the rule to prevent 

these practices.261 The Commission 

determines that the rule adequately 

protects consumers from the posited 

scenarios without modification. 

businesses cannot characterize fees as 

optional and exclude them from total 

price when businesses require 

consumers to purchase the good or 

service for which the fees are charged 

and employ practices, such as default 

billing or opt-out provisions, that 

effectively take away consumers’ ability 

to consent to the fees. For example, a 

previously undisclosed resort fee that a 

hotel discloses at check-in is not an 

optional fee if the hotel will charge the 

fee unless the guest challenges the fee. 

Final § 464.3 prohibits misrepresenting 

the nature, purpose, amount, and 

refundability of fees, including 

misrepresenting mandatory fees as 

optional fees from which consumers 

must opt out.262

Whether fees for ancillary goods or 

services must be included in total price 

will depend on the specific factual 

circumstances. The inclusion of the 

defined term ‘‘ancillary good or service’’ 

in the definition of ‘‘total price’’ clarifies 

that total price includes ‘‘additional 

good(s) or service(s) offered to a 

consumer as part of the same 

transaction.’’ Businesses cannot exclude 

mandatory fees from total price simply 

by characterizing them as not part of the 

same transaction if, in fact, they are. 

(b) Maximum Total 

The rule provides that ‘‘total price’’ is 

the ‘‘maximum total’’ of all mandatory 

fees except identified permissible 

exclusions. Some commenters objected 

to defining ‘‘total price’’ as the 

maximum total, arguing that it could 

discourage advertising discounted rates 

or misrepresent actual costs and 

interfere with comparison shopping.263

Other commenters suggested that the 

reference to maximum total would 

require businesses that enter into 

continuous service contracts with 

consumers (e.g., subscriptions) to 

include in total price all mandatory fees 

that might arise over the duration of a 

contract, which they argued would be 

difficult to determine at the time the 

rule requires a total price disclosure.264

Some commenters argued that 

continuous service contracts that reflect 

negotiated transactions do not raise 

‘‘bait and switch’’ concerns and that 

total price is adequately disclosed in 

such contracts.265

The Commission has considered 

comments relating to the ‘‘maximum 

total’’ requirement and retains that 

language in the definition of ‘‘total 

price.’’ The Commission determines that 

such language is necessary to protect 

consumers from advertised total prices 

that are deceptively lower than what 

businesses actually charge. As the 

Commission noted in the NPRM, ‘‘[t]he 

use of the phrase ‘maximum total’ 

would allow businesses to apply 

discounts and rebates after disclosing 

total price.’’ 266 Since all businesses are 

subject to the maximum total 

requirement for covered goods or 

services, the resulting level playing field 

would allow for comparison shopping. 

The Commission does not agree that 

disclosures in contracts or agreements 

adequately protect consumers from 

deceptive advertising that omits 

mandatory fees. 

Commenters questioned how 

businesses should handle conditions or 

limitations on advertised prices.267

Businesses must comply with the rule 

and other disclosure requirements, 

including those related to material 

conditions or limitations.268 Businesses 

that advertise prices that are not 

attainable by consumers because the 

prices are conditioned on undisclosed 

material conditions, restrictions, or 

limitations may fail to disclose and 

misrepresent total price. 

(c) Itemization 

The rule neither requires, nor 

prohibits, the itemization of mandatory 

fees that must be included in total price. 

The Commission notes that final 

§ 464.2(c) requires disclosure of the 

nature, purpose, and amount of fees or 

charges imposed on the transaction that 

have been excluded from total price but 

declines to modify the regulatory text 

proposed in the NPRM to otherwise 

require or prohibit the itemization of 

fees. 

Some commenters recommended that 

the rule not require itemization.269

Other commenters stated that including 

mandatory fees in total price would 

obscure the nature and purpose of the 

fees and provide less information to 

consumers,270 while others 


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(FreedomWorks); FTC–2023–0064–3263 (Flex 

Association); FTC–2023–0064–3258 (National 

Taxpayers Union Foundation). 

271See, e.g., FTC–2023–0064–3304 (Recording 

Academy stated: ‘‘Price itemization is the only way 

to ensure pricing is transparent and that all parties 

involved in setting the ticket’s total price are held 

accountable for what they charge.’’); FTC–2023– 

0064–3230 (Future of Music Coalition); FTC–2023– 

0064–3250 (National Independent Talent 

Organization); FTC–2023–0064–3283 (National 

Consumer Law Center, Prison Policy Initiative, and 

advocate Stephen Raher stated that itemization is 

necessary to clarify opaque charges in the context 

of consumer correctional services.); FTC–2023– 

0064–3290 (U.S. Public Interest Research Group 

Education Fund). 

272See, e.g., FTC–2023–0064–3212 (TickPick, 

LLC). 

273FTC–2023–0064–3195 (League of American 

Orchestras et al.). 

recommended that the rule require 

itemization to provide more information 

to consumers and to protect other 

transaction participants by disclosing 

where mandatory fees go.271 Other 

commenters recommended that the rule 

prohibit itemization because fees could 

be arbitrary or invented by businesses 

and itemizing them could misrepresent 

their nature and purpose.272

The Commission has considered the 

comments and declines to require or 

prohibit the itemization of mandatory 

fees, except as provided by § 464.2(c). 

Section 464.2 of the rule permits, but 

does not require, itemization of the 

components of total price, and therefore 

allows businesses to break out 

transaction inputs, consistent with laws 

that require itemization. When 

businesses choose to itemize mandatory 

fees that are a part of total price or 

itemize fees pursuant to § 464.2(c), total 

price must be displayed more 

prominently than itemized fees. Further, 

§ 464.3 prohibits misrepresenting 

itemized fees. 

(d) Exclusions From Total Price 

The definition of ‘‘total price’’ in final 

§ 464.1 is modified from the proposed 

definition to the extent that the 

definitions of ‘‘government charges’’ 

and ‘‘shipping charges’’ are modified, as 

discussed in section III at A.5 and A.7. 

Finally, the definition of ‘‘total price’’ 

clarifies that businesses may exclude 

fees or charges for optional ancillary 

goods or services. 

(e) Intersection With IRS Requirements 

One commenter sought clarification 

as to the intersection of the total price 

requirements with Internal Revenue 

Service (‘‘IRS’’) requirements regarding 

charitable gifts.273 The commenter 

specifically highlighted a scenario in 

which charitable contributions are made 

concurrent with ticket sales. The 

Commission is not aware of—and 

indeed, the commenter did not cite to— 

any specific conflict with the final rule. 

Instead, the commenter asked about the 

rule’s intersection with the IRS’s 

Substantiation and Disclosure 

Requirements. Based on the 

Commission’s review, the IRS 

Substantiation and Disclosure 

Requirements pertain to substantiation 

requirements for donors who contribute 

to charitable organizations or causes, 

and disclosure requirements for 

charitable organizations that provide 

goods or services to donors for certain 

contributions. The Commission’s rule 

has no bearing on, and does not change 

or impact, any of these IRS 

requirements. The commenter also 

stated that ‘‘the concept of 

‘refundability’’’ is ‘‘not common in 

charitable giving.’’ As set forth in 

section III.B.3, the Commission 

eliminates the requirement that 

businesses affirmatively disclose the 

refundability of each fee or charge 

imposed; however, § 464.3 still 

prohibits businesses from 

misrepresenting a fee’s refundability. 

B. § 464.2 Hidden Fees Prohibited 

Proposed § 464.2(a) and (b) in the 

NPRM provided, respectively, that it 

would be a violation of the rule for a 

business to ‘‘offer, display, or advertise 

an amount a consumer may pay without 

clearly and conspicuously disclosing 

total price’’ and that ‘‘[i]n any such 

offer, display, or advertisement that 

contains an amount a consumer may 

pay, a business must display total price 

more prominently than any other 

pricing information.’’ As discussed 

herein, final § 464.2 makes certain 

modifications to proposed § 464.2(a) 

and (b) and consolidates all provisions 

related to disclosures by relocating 

proposed § 464.3(b), with certain 

modifications, to final § 464.2(c). 

As discussed in section III.B.1 and 

III.B.2, to address commenter concerns 

that ‘‘an amount a consumer may pay’’ 

is vague and overbroad, the Commission 

modifies final § 464.2(a) and (b) as 

compared to the NPRM proposals to 

focus their required disclosures on 

offers, displays, or advertisements that 

include ‘‘any price of a covered good or 

service.’’ Final § 464.2(b) also clarifies 

that, in any offer, display, or 

advertisement that represents any price 

of a covered good or service, total price 

must be more prominent than other 

pricing information, except if the final 

amount of payment for a transaction is 

displayed, the final amount of payment 

must be more prominent than, or as 

prominent as, total price. 

As discussed in section III.B.3, the 

Commission also consolidates all 

provisions related to required 

disclosures under § 464.2 of the rule 

and, therefore, codifies proposed 

§ 464.3(b) with certain modifications at 

final § 464.2(c). Proposed § 464.3(b) 

specified that businesses must disclose 

clearly and conspicuously, and before 

the consumer consents to pay, the 

nature and purpose of any amount a 

consumer may pay that is excluded 

from total price. The Commission 

clarifies that, in line with the narrower 

scope of the rule, the trigger requiring 

disclosures in final § 464.2(c) is ‘‘before 

the consumer consents to pay for any 

covered good or service.’’ As with final 

§ 464.2(a) and (b), final § 464.2(c) also 

eliminates the reference to ‘‘any amount 

a consumer may pay’’ to narrow the 

focus of the disclosures required by 

§ 464.2(c)(1) to ‘‘any fee or charge 

imposed on the transaction that has 

been excluded from total price.’’ 

Final § 464.2(c) also differs from the 

NPRM proposal in that it explicitly 

requires disclosure of the amount, 

nature, and purpose of any fees or 

charges imposed on the transaction that 

have been excluded from total price and 

the identity of the good or service for 

which the fees or charge is imposed, as 

well as the final amount of payment for 

the transaction. Importantly, to preserve 

choice and control for businesses, 

§ 464.2(c)’s disclosures with respect to 

government charges and shipping 

charges are only required if a business 

elects to permissibly exclude such 

charges from total price. Similarly, 

§ 464.2(c)’s disclosures with respect to 

fees for optional ancillary goods or 

services are only required if the 

consumer has elected to purchase such 

goods or services as part of the same 

transaction and the business has 

excluded their fees from total price. 

Nothing in the final rule requires a 

business to disclose commercially 

sensitive information regarding the 

components of its total price. 

The Commission discusses herein 

changes to the text of the proposed 

provisions and addresses substantive 

comments about these provisions, 

including how § 464.2 would apply to 

specific pricing scenarios discussed in 

the comment record. 

1. § 464.2(a) 

Proposed § 464.2(a) in the NPRM 

provided that it would be a violation of 

the rule for a business to ‘‘offer, display, 

or advertise an amount a consumer may 

pay without clearly and conspicuously 

disclosing total price,’’ which was 

defined in proposed § 464.1(g) as ‘‘the 

maximum total of all fees or charges a 

consumer must pay for a good or service 

and any mandatory ancillary good or 

service, except that shipping charges 


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274See, e.g., FTC–2023–0064–3206 (Motor 

Vehicle Protection Products Association et al. 

commented that proposed § 464.3, in referring to 

any amount a consumer may pay, goes ‘‘far broader 

than ‘fees’’’ and ‘‘the use of the verb ‘may’ suggests 

that even offers of goods or services—or, frankly, 

even goods or services that ‘may be’ available but 

not actually offered—impermissibly and 

imprudently stretches this section.’’). 

275See, e.g., FTC–2023–0064–3127 (U.S. Chamber 

of Commerce stated that variable fees should be 

excluded from Total Price because: fees that ‘‘vary 

based on volume, transaction type, and region’’ 

cannot be assessed until consumers take some 

action; requiring their inclusion in Total Price 

‘‘could less efficiently spread costs, undermine 

consumer choice, and eliminate price competition 

on certain cost inputs’’; and ‘‘[t]he NPRM also 

provides no reason to think that variable or 

dynamic pricing is necessarily deceptive or unfair 

across all industries and sectors of the economy.’’); 

FTC–2023–0064–3137 (Chamber of Progress 

expressed concern about the rule’s impact on 

variable pricing models, including delivery 

platforms, where ‘‘the prices for delivery or other 

services increase as the size of the order increases,’’ 

which it asserts is ‘‘a more efficient way of 

distributing costs than flat rates’’ and asserted it is 

not clear how such platforms would comply with 

the rule ‘‘without creating confusion for customers 

or misrepresenting prices.’’); FTC–2023–0064–3173 

(Center for Individual Freedom argued that: 

‘‘Acknowledging the distinct roles and objectives of 

both flat and variable fees in different industries is 

crucial, and the proposed rule’s failure to recognize 

the benefits of variable pricing structures, which 

allow fees to scale based on the nature of the items 

or services purchased, is a significant oversight.’’); 

FTC–2023–0064–3258 (National Taxpayers Union 

Foundation stated that under the rule, ‘‘it will be 

nearly impossible for businesses using variable 

prices to display the Total Price at all times, 

because businesses are unable to predict 

consumer’s choices.’’); FTC–2023–0064–3202 

(TechNet urged the Commission to exclude from 

Total Price ‘‘fees that are variable or unknowable,’’ 

such as in e-commerce marketplaces, or the rule 

‘‘would complicate the communication of pricing in 

situations where the ‘total price cannot practically 

be determined’ in advance.’’); FTC–2023–0064– 

3263 (Flex Association commented that app-based 

delivery platforms could be ‘‘forced to change the 

way they price entirely—moving from variable . . . 

to static fees . . . that would not benefit 

consumers’’); FTC–2023–0064–3238 (Gibson, Dunn 

& Crutcher LLP commented that the proposed rule 

failed to consider reliance on dynamic pricing that 

depends on consumer choices throughout the 

buying process). 

276See, e.g., FTC–2023–0064–3134 (U.S. 

Department of Transportation, Federal Motor 

Carrier Safety Administration recommended that 

the rule prohibit ‘‘charging variable mandatory 

ancillary fees if the full amount of such variable 

fees cannot be calculated in the upfront price.’’); 

FTC–2023–0064–3275 (Berkeley Center for 

Consumer Law & Economic Justice et al. asserted 

that concerns ‘‘that it is impossible to accurately 

estimate all fees in advance of providing a complex 

service’’ or fees dependent on consumer choice, are 

‘‘easily resolvable with minimal effort and 

creativity on the part of vendors.’’). 

277See, e.g., FTC–2023–0064–3233 (NCTA—The 

internet & Television Association commented that 

the definition of ‘‘Total Price’’ is ambiguous as ‘‘it 

does not clearly address fees that are contingent on 

later actions by particular consumers . . . such as 

for unreturned equipment or late payment of the 

consumer’s bill’’ and encouraged the Commission 

to ‘‘resolve the ambiguity by, among other things, 

making clear in the rule itself that contingent or 

avoidable fees are to be excluded from the Total 

Price.’’). 

278See, e.g., FTC–2023–0064–3195 (League of 

American Orchestras et al. requested the 

Commission’s ‘‘consideration for season-based and 

flexible ticket packages in which multiple and 

variable options are available to ticket-buyers, and 

the total price will vary based on selection.’’). 

and government charges may be 

excluded.’’ In final § 464.2(a), the 

Commission changes the reference to 

‘‘an amount a consumer may pay’’ to the 

more limited ‘‘any price of a covered 

good or service.’’ Final § 464.2(a) also 

further clarifies that businesses may 

exclude from total price fees or charges 

for any optional ancillary good or 

service. The Commission makes these 

modifications to address NPRM 

comments and to clarify the rule. The 

comments relating to the exclusion from 

total price of charges for any optional 

ancillary good or service, and the 

Commission’s reasons for allowing these 

exclusions, are discussed in section III 

at A.1 and A.8. 

Commenters argued that the reference 

to ‘‘an amount a consumer may pay’’ in 

proposed § 464.2(a) and in other 

sections (i.e., proposed §§ 464.2(b) and 

464.3(b)) was overbroad and that the 

Commission failed to consider its 

application to various pricing 

scenarios.274 In response to these 

comments, the Commission finalizes 

§ 464.2(a) with modification to limit the 

total price disclosure requirement from 

each time businesses ‘‘offer, display, or 

advertise an amount a consumer may 

pay’’ to only when they ‘‘offer, display, 

or advertise any price of a covered good 

or service.’’ The Commission also 

provides guidance regarding the 

application of § 464.2(a) to various types 

of fees and pricing scenarios, including: 

contingent fees; ticket service fees; 

credit card surcharges; dynamic pricing 

and national advertising; rebates, 

bundled pricing, and discounts; and 

online marketplaces in section III.B.1.a 

through f. 

(a) Contingent Fees 

Under certain circumstances 

discussed herein, total price can 

exclude certain fees that businesses 

cannot calculate in advance because 

they necessarily are contingent on 

consumer behavior or choice; unknown, 

external factors; or pricing models that 

include variable fees. The Commission 

notes that whether certain contingent 

fees cannot be calculated and are truly 

unknown at the time the rule requires 

disclosures may depend on the specific 

factual circumstances. The Commission 

is not persuaded by the comments to 

change the rule as it applies to 

contingent fees. 

Certain commenters remarked that, in 

some instances, businesses cannot quote 

an all-inclusive price due to unknown 

fees arising from consumer behavior and 

choices during and after the purchasing 

process; unknown, external factors; or 

pricing models that have variable rates 

such as hourly rates or rates based on 

guest count and consumption. Indeed, 

some commenters argued that the 

Commission’s failure to recognize the 

existence of variable marketplace fees is 

a significant oversight of the proposed 

rule.275 Other commenters observed that 

concerns about variable marketplace 

fees are overblown and stated that the 

Commission should prohibit charging 

such fees if the full amount of such fees 

cannot be calculated in the upfront 

price.276

The Commission finds that, to the 

extent that certain fees are contingent on 

later conduct or choices by a consumer 

after purchase (e.g., pet fees, fees for late 

payments, fees for property damage at a 

rental accommodation, or smoking in a 

non-smoking hotel room), these fees are 

not mandatory for purposes of the 

transaction, and as such, do not need to 

be included in total price.277 The 

Commission notes that fees that are 

unavoidable by the consumer, 

regardless of conduct or choices, are not 

contingent. Ultimately, if a business 

cannot ascertain whether certain fees or 

charges apply until after concluding a 

purchase or transaction, the business 

need not include such fees or charges in 

total price. Whether mandatory fees are 

truly unknown due to reasons beyond a 

business’s control will depend on 

specific factual circumstances. 

Businesses should include in total 

price other fees that may vary 

depending on a consumer’s choices 

during the purchase process or 

transaction as soon as consumers 

provide the business with the 

information needed to determine the 

applicability or amount of those fees. 

Indeed, some commenters discussed 

different scenarios in which total price 

depends on a consumer’s choices while 

buying a good or service, such as season 

and flexible ticket packages for the 

arts.278 According to some commenters, 

consumers expect fees arising from their 

personal choices and customizations to 

be disclosed only after providing 

additional information to, or negotiating 

with, sellers. Businesses can include in 

their advertisements ‘‘starting at’’ or 

base prices to deal with situations in 

which ultimate price may depend on a 

consumer’s selection of various 

ticketing and lodging options, but only 

if consumers can in fact obtain the 


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279 In some instances, advertising prices as a base 

or starting price can be deceptive, depending on the 

relevant limiting or qualifying criteria. In such 

instances, the material terms, conditions and 

obligations upon which receipt and retention of the 

base or starting price are contingent should be set 

forth clearly and conspicuously at the outset of the 

offer so as to leave no reasonable probability that 

the terms of the offer might be misunderstood. 

280See, e.g., FTC–2023–0064–3266 (StubHub, Inc. 

submitted a comment supporting nationwide all-in 

pricing and including Total Price in every 

advertisement to consumers and throughout the 

transaction.); FTC–2023–0064–3105 (Charleston 

Symphony commented: ‘‘[R]equiring sellers to 

disclose the total price clearly and conspicuously[ ] 

addresses a pressing issue. . . . Predatory practices 

in the secondary ticket sales market pose a 

significant threat to artists, venues, audiences, and 

the future of nonprofit arts organizations, impacting 

the integrity of the ticket-buying process and 

eroding audience confidence.’’); FTC–2023–0064– 

3122 (Vivid Seats stated that it ‘‘supports additional 

consumer disclosures, including all-in pricing,’’ but 

the rule should ‘‘apply equally across all parts of 

the live-events ticketing industry,’’ so consumers 

can compare prices and businesses that display 

total prices will not be at a competitive 

disadvantage.); FTC–2023–0064–3241 (National 

Association of Ticket Brokers submitted a comment 

supporting all-in pricing, but noting that it would 

only work if ‘‘(i) it was required of every ticket 

seller and (ii) there was rigorous and expeditious 

enforcement.’’); FTC–2023–0064–3306 (Live Nation 

Entertainment and its subsidiary Ticketmaster 

North America commented that they ‘‘support[ ] a 

definition of all-in pricing that requires the first 

price for a live-event ticket shown to consumers to 

be the price ultimately charged at checkout 

(exclusive of state and local taxes and optional addons).’’); see also FTC–2023–0064–3264 (Mark J. 

Perry, Ph.D., Professor Emeritus of Economics at 

University of Michigan-Flint and Senior Fellow 

Emeritus at the American Enterprise Institute, 

‘‘urge[d] the FTC to ensure that any rule requiring 

all-in pricing in live events apply equally to all 

market participants.’’); FTC–2023–0064–2856 

(National Football League stated that if the liveevent ticket industry is included in the rule’s 

coverage, the Commission must ‘‘include all sellers 

of live-event tickets to prevent inconsistencies in its 

application.’’). 

281See, e.g., FTC–2023–0064–3122 (Vivid Seats 

commented that service fees ‘‘are the TRM’s [ticket 

resale marketplace’s] sole source of revenue and 

provide the capital necessary to operate the TRM.’’); 

FTC–2023–0064–3306 (Live Nation Entertainment 

and its subsidiary Ticketmaster North America 

commented that a ticket service charge 

‘‘compensates the venue for hosting the event and 

the ticketing company for distributing tickets and 

related services—important since venues and 

ticketing companies typically do not share in 

revenues attributable to a ticket’s face value.’’). 

282See, e.g., FTC–2023–0064–3122 (Vivid Seats 

commented that delivery fees cover costs associated 

with delivering a ticket.); FTC–2023–0064–3306 

(Live Nation Entertainment and its subsidiary 

Ticketmaster North America); FTC–2023–0064– 

3292 (National Association of Theatre Owners 

commented: ‘‘These fees allow moviegoers to 

purchase tickets and select their seats from home, 

and this service requires ongoing support and 

management, entailing operational costs that are 

offset by convenience fees. At the same time 

customers can avoid the convenience fee altogether 

by purchasing directly at the box office.’’) FTC– 

2023–0064–3264 (Mark J. Perry, Ph.D., Professor 

Emeritus of Economics at University of MichiganFlint and Senior Fellow Emeritus at the American 

Enterprise Institute, commented that ticket resale 

marketplaces offer numerous valuable services to 

ticket sellers and buyers that a single seller or buyer 

could not access otherwise, including access to 

buyers or tickets, inventory management, seller and 

customer support, secure financial transactions, and 

guarantees.’’). 

283FTC–2023–0064–3306 (Live Nation 

Entertainment and its subsidiary Ticketmaster 

North America commented: ‘‘Because the practice 

of adding these charges to the ticket’s face value has 

been so longstanding, consumers have come to 

expect service fees when purchasing a ticket to a 

live entertainment event—but it is impossible for 

consumers to anticipate the amount of applicable 

fees because those rates are set by hundreds of 

different venues and can vary accordingly.’’ The 

commenter continued, ‘‘Consumers therefore need 

clear disclosures about the true price of a ticket, 

including the elements that constitute the all-in 

price.’’). 

284FTC–2023–0064–3266 (StubHub, Inc. 

supported the exclusion of ‘‘fees for optional addon features selected at the discretion of the 

consumer.’’ As an example, the commenter stated, 

‘‘[I]n some instances, consumers may not have a 

choice on delivery method. In those cases, delivery 

fees are mandatory and should be included in the 

[Total Price] because the consumer has no 

discretion to choose. In other instances, consumers 

have multiple delivery options at different price 

points.’’). 

285See, e.g., FTC–2023–0064–3230 (Future of 

Music Coalition commented that ‘‘adopting all in 

pricing without itemization [of the base ticket price 

or face value and of fee amounts] would be a gift 

to . . . predatory resellers.’’); FTC–2023–0064–3250 

(National Independent Talent Organization stressed 

‘‘the need for an itemized breakdown of ticket fees’’ 

and called for ‘‘fees to be clearly itemized 

throughout the purchasing process.’’); FTC–2023– 

0064–3304 (Recording Academy commented: ‘‘Price 

itemization is the only way to effectively regulate 

transparent pricing in a manner that truly informs 

the consumer about how their dollar is being spent 

. . . . Additionally, price itemization is the only 

way to effectively hold third party fees and charges 

in check.’’). But see FTC–2023–0064–3212 

(TickPick, LLC commented that the rule ‘‘must 

prohibit the itemization of fees and charges that 

make up the Total Price (other than breaking out 

government taxes and shipping fees) in order to 

prevent harm from hidden and/or misleading fees.’’ 

The commenter stated concerns that such fees were 

‘‘arbitrary’’ and ‘‘any secondary ticketing 

marketplace that itemizes mandatory fees and 

charges is arguably misrepresenting the ‘nature and 

purpose of any amount a consumer may pay.’ ’’). 

advertised ticket or lodging for the 

‘‘starting at’’ or base price.279

Businesses still must clearly and 

conspicuously disclose the nature, 

purpose, and amount of such fees or 

charges and the identity of the good or 

service for which they are imposed, and 

the final amount of payment, before a 

consumer consents to pay or, if the 

applicability of a fee or charge is 

contingent on later conduct or choices 

by a consumer after purchase, as soon 

as such circumstances arise. Businesses 

also must not mispresent those or other 

fees or charges, including total price. 

(b) Ticket Service Fees 

Businesses operating in the live-event 

ticketing industry, including venues, 

ticket sellers, and ticket resellers, 

historically have imposed on consumers 

a host of charges in addition to the 

ticket’s face value that are dripped in 

throughout the purchasing process. One 

of the rule’s principal purposes is to 

give consumers upfront knowledge of 

the true cost of a good or service, 

including mandatory charges, without 

being forced to navigate through a timeintensive search and transaction. A 

broad swath of industry members 

supported a nationwide total price 

requirement for ticket pricing,280

although some industry commenters 

expressed concerns with certain aspects 

of the rule. The Commission addresses 

commenters’ concerns herein. 

Some industry members emphasized 

that the added fees are their primary 

source of revenue, since they typically 

do not share in the revenue from the 

ticket’s face value.281 Industry members 

and an academic commenter also stated 

that certain added fees pay for valuable 

services such as delivery and the 

convenience of selecting a seat from 

home.282 An industry member 

emphasized, however, that although 

consumers do expect additional fees, 

businesses nonetheless should clearly 

disclose a ticket’s true, all-in price (i.e., 

total price).283 Another industry 

member commented that unless an 

added fee is truly optional, it should be 

included in total price.284 The 

Commission reiterates that businesses 

are not prohibited from charging fees; 

instead § 464.2(a) requires the 

disclosure of total price, including fees 

for mandatory ancillary goods or 

services, when a price for a good or 

service is displayed, while § 464.2(c) 

requires disclosures about fees being 

imposed on the transaction that have 

been permissibly excluded from total 

price, including for optional ancillary 

goods or services, before a consumer 

consents to pay for a covered good or 

service. The Commission further 

reiterates that, in an online transaction, 

fees such as for payment processing, 

electronic ticket ‘‘delivery,’’ 

‘‘convenience,’’ or similar add-on 

ticketing fees are mandatory and must 

be included in total price if a consumer 

cannot obtain the covered good or 

service as part of the same transaction 

(e.g., online) without incurring the fee. 

Final § 464.3 also prohibits businesses 

from misrepresenting the nature or 

purpose, or the identity of the good or 

service for which fees are imposed. 

Some industry members expressed 

concern that the rule would prohibit 

itemization of fees in addition to total 

price, while others argued that it should 

prohibit such itemization.285 The 

Commission clarifies that, so long as 

total price is displayed clearly and 

conspicuously, and more prominently 

than any itemized fees, the rule does not 

prohibit businesses from itemizing the 


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286See, e.g., FTC–2023–0064–3217 (Bowling 

Proprietors’ Association of America); FTC–2023– 

0064–2755 (Caffe! Caffe!); FTC–2023–0064–3114 

(Shine Beer Sanctuary); FTC–2023–0064–1456 

(MED Murphy St. Enterprise); see also, e.g., FTC– 

2023–0064–2953; FTC–2023–0064–2972 (Over 

4,600 comments submitted through a National 

Restaurant Association mass mailing campaign 

misinterpreted the rule as ‘‘eliminating the use of 

fees and surcharges.’’). 

287See, e.g., FTC–2023–0064–3300 (National 

Restaurant Association); FTC–2023–0064–3128 

(Merchants Payments Coalition); FTC–2023–0064– 

3219 (Georgia Restaurant Association); FTC–2023– 

0064–3180 (Independent Restaurant Coalition). 

288See, e.g., FTC–2023–0064–3180 (Independent 

Restaurant Coalition commented: ‘‘Clearly and 

prominently displaying any fees promotes 

transparency and fairness as well as allowing 

restaurants to meet the needs of their workers and 

customers.’’); FTC–2023–0064–2891 (Mary 

Sullivan, George Washington University, Regulatory 

Studies Center). 

289See, e.g., FTC–2023–0064–3128 (Merchants 

Payments Coalition); FTC–2023–0064–3140 

(Merchant Advisory Group stated: ‘‘When 

appropriately disclosed, consumers can typically 

avoid these fees by simply choosing lower-cost 

forms of payment, and this could help keep prices 

down for consumers overall.’’); FTC–2023–0064– 

3300 (National Restaurant Association commented: 

‘‘When a credit card surcharge is properly disclosed 

via in-store signage, on the menu, and on the 

receipt, customers have a clear understanding that 

the fee is a product of the card companies, not the 

restaurant.’’). 

290FTC–2023–0064–2891 (Mary Sullivan, George 

Washington University, Regulatory Studies Center). 

291FTC–2023–0064–3268 (Housing & Eviction 

Defense Clinic, University of Connecticut School of 

Law). 

292FTC–2023–0064–1294 (James J. Angel, Ph.D., 

CFP, CFA, Professor, Georgetown University, 

McDonough School of Business). 

293This approach is consistent with the 

Telemarketing Sales Rule, which requires sellers 

and telemarketers to disclose, in a clear and 

conspicuous manner, the total cost of a good or 

service, which would include any applicable credit 

card or other payment processing charges, before a 

consumer consents to pay for that good or service. 

16 CFR 310.3(a)(1)(i) and (a)(2)(i). 

294See, e.g., FTC–2023–0064–3195 (League of 

American Orchestras et al. observed: ‘‘It would be 

harmful to paint all dynamic pricing strategies as 

‘unfair.’ Nonprofit performing arts organizations 

often use variable pricing strategies to both 

maximize the earned revenue that supports the 

nonprofit performing arts workforce, as well as to 

offer reduced or free-of-charge ticketing options for 

community-based partners.’’); FTC–2023–0064– 

3230 (Future of Music Coalition stated that dynamic 

pricing ‘‘can certainly be used in ways that frustrate 

consumers’’ but ‘‘can also solve practical 

problems.’’ It is ‘‘often used by nonprofit arts 

presenters in non-problematic ways.’’ The 

commenter noted, however, that ‘‘disclosure of 

specific dynamic pricing strategies and tools, 

whether manual or algorithmic[,] will only help 

Continued 

charges imposed on a transaction. 

However, any such itemization must not 

misrepresent the nature, purpose, 

amount, or refundability of the itemized 

fees, including the identity of the goods 

or services for which they are being 

charged. 

(c) Credit Card and Other Payment 

Processing Surcharges 

The rule requires businesses to 

include credit card surcharges or 

processing fees in total price only if they 

choose to make payment by credit card 

mandatory. If, on the other hand, credit 

card use is optional because consumers 

can use multiple payment options, those 

fees do not need to be included in total 

price. If the consumer chooses to use a 

credit card, businesses must clearly and 

conspicuously disclose the nature, 

purpose, and amount of any credit card 

surcharge before the consumer consents 

to pay. Some commenters expressed 

concern about the rule’s application to 

credit card fees but, as discussed herein, 

the Commission was not persuaded by 

the comments to change the proposed 

rule as it applies to such fees. 

Many commenters expressed concern 

that the rule would require total price to 

include credit card processing fees or 

prohibit businesses from passing 

through such fees to consumers. This 

was of particular concern to small 

businesses.286 Numerous industry 

members also commented that requiring 

such fees to be part of total price would 

reduce price transparency and penalize 

customers who want or need to pay 

with cash.287

Various commenters suggested that if 

businesses properly disclose credit card 

processing charges and provide 

alternate payment methods, both 

consumers and businesses would 

benefit.288 Commenters noted that, 

when appropriately disclosed, 

consumers can avoid such fees by 

choosing another form of payment.289

An academic commenter suggested that 

prominent disclosure of a credit card 

surcharge in advance, so consumers can 

avoid it, would benefit consumers and 

reduce business costs more than 

requiring such charges to be included in 

total price.290 A tenant advocacy legal 

clinic that generally supported requiring 

credit card processing charges to be 

included in total price, suggested that 

such charges might be reasonably 

avoidable if disclosed in advance to let 

consumers use a different payment 

method.291 Another academic 

commenter recommended that the 

Commission clarify that, while credit 

card surcharges need not be included in 

total price, a business can only pass 

through the actual amount of the charge 

and must clearly and conspicuously 

disclose any markup it imposes.292

The Commission notes that the rule 

does not prohibit a business from 

charging or passing through credit card 

fees if otherwise allowed by law. The 

rule does not affect State laws that 

prohibit credit card surcharges. Whether 

credit card charges must be included in 

total price, however, depends on 

whether a business makes such fees 

mandatory, for example, by not 

providing any other payment option for 

the transaction. For example, if a 

consumer is purchasing a ticket online, 

there must be another online payment 

option that does not require a fee, not 

merely an option to go in person to the 

box office to purchase the ticket with 

cash for no additional fee. 

In other words, if there is no other 

payment option for an offered 

transaction, or if every payment option 

requires a fee or charge, such fees are 

mandatory and must be included in 

total price.293 But, if a business offers 

consumers multiple viable payment 

options for the offered transaction, so 

that paying with a credit card is 

optional, then credit card fees need not 

be included in total price. The same is 

true for debit card surcharges and other 

payment processing fees. 

A business that provides at least one 

viable method to pay for the offered 

transaction without a fee, chooses to 

pass through payment processing fees to 

consumers, and excludes such fees from 

total price would have to clearly and 

conspicuously disclose the nature, 

purpose, and amount of the processing 

fees before a consumer consents to pay. 

In addition, nothing in the rule 

prohibits businesses that accept 

multiple viable forms of payment from 

advertising two prices, one that includes 

credit card or other payment processing 

fees and one that does not. It is the 

Commission’s understanding that some 

businesses already do this, and such a 

strategy is consistent with the rule. 

In addition, under final § 464.3, a 

business that offers, displays, or 

advertises a covered good or service 

cannot misrepresent the nature, 

purpose, amount, or refundability of 

credit card or other fees. Since the rule 

does not prohibit itemization, a business 

may choose to also itemize mandatory 

credit card fees so long as they are 

included in total price and total price is 

displayed more prominently. The 

voluntary itemization of mandatory 

credit card fees addresses commenters’ 

concerns that consumers will not 

understand the different costs affecting 

businesses. 

(d) Dynamic Pricing and National 

Advertising 

Some commenters expressed concern 

that the total price requirements will 

interfere with dynamic pricing strategies 

where total price is not fixed but 

changes based on supply, demand, or 

other factors.294 The rule does not bar 


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predatory resellers make purchasing decisions and 

maximize their extraction of value.’’). 295See, e.g., FTC–2023–0064–3127 (U.S. Chamber 

of Commerce commented that the Total Price 

requirements ‘‘may eliminate the opportunity for 

national advertising campaigns’’ because 

‘‘[m]andatory fees [such as regional sports fees] may 

vary by location or tie to specific franchisee costs.’’ 

The commenter recommended that the FTC 

‘‘consider revising the definition of ‘Total Price’ to 

exclude all charges that vary based on geographic 

region.’’); FTC–2023–0064–3294 (International 

Franchise Association commented: ‘‘Under the 

Proposed Rule, national marketing campaigns are 

only workable if all franchised businesses in a 

franchise system adhere to the same pricing regime 

(including pass-through fees), regardless of the 

economic demands of the markets in which they 

operate.’’); FTC–2023–0064–3300 (National 

Restaurant Association commented: ‘‘Like 

‘Shipping Charges,’ delivery fees should be 

excluded from the ‘Total Price’ requirement since 

local or national advertising may feature the cost of 

the food item but cannot reasonably predict how 

regional market conditions will alter the price of 

delivery.’’). 

296See, e.g., FTC–2023–0064–3233 (NCTA—The 

Internet & Television Association stated that the 

rule would interfere with ‘‘efforts to advertise 

pricing nationwide or to a broad audience’’ and 

would require impractical and technically 

challenging geo-targeted advertising. The 

commenter further stated that businesses may be 

incentivized to ‘‘‘‘advertis[e] a Total Price for a 

particular service option that overstates the price 

that most consumers would actually end up paying 

at their service location (i.e., the Total Price would 

be the maximum price that any potential customer 

in the provider’s footprint would have to pay for 

the service),’’ which would ‘‘confuse consumers 

and undermine the type of comparison-shopping 

the FTC is aiming to facilitate. Bundled pricing 

would be even more challenging to calculate and 

represent in advertising, given that each bundled 

service could have multiple different applicable 

taxes or surcharges.’’). 

297 Id. 

298See, e.g., FTC–2023–0064–2919 (National 

Automatic Merchandising Association) (expressing 

concern that the rule would ban offering cash 

discounts); see also, FTC–2023–0064–3217 

(Bowling Proprietors’ Association of America) 

(stating that requiring businesses to consolidate 

‘‘diverse pricing models into a single displayed 

price could lead to significant consumer confusion 

and dissatisfaction.’’). 

299FTC–2023–0064–3263 (Flex Association 

commented that some fees cannot be calculated at 

the start of a transaction, including for discounts 

and special offers: ‘‘For example, a ‘two-for-one’ 

offer cannot be activated until two eligible items are 

added to a shopping cart.’’); FTC–2023–0064–3137 

(Chamber of Progress commented that sellers may 

abandon discounts on bundles of goods or bulk 

orders, because ‘‘the total price of each good could 

vary depending on the other items in the customer’s 

cart.’’). 

300FTC–2023–0064–2887 (Progressive Policy 

Institute commented, ‘‘the proposed disclosure 

requirements may interfere with the use of different 

pricing models that provide value to consumers and 

are the basis upon which some firms compete,’’ 

such as unbundled pricing models when ‘‘the total 

price may not be known until the consumer 

completes the purchase process,’’ and therefore, a 

‘‘requirement to display prices before the purchase 

. . . may mislead consumers and distort 

competition.’’). 

301FTC–2023–0064–3187 (U.S. Department of 

Justice, Antitrust Division). 

302 Id. 

303 Id. 

businesses from engaging in dynamic 

pricing, but adjusted prices must 

include all known mandatory fees and 

the advertised good or service must be 

actually available to consumers at the 

quoted price. The Commission’s review 

of the comments did not identify any 

persuasive reason to change the rule as 

it applies to dynamic pricing. 

A few commenters noted that the rule 

could interfere with businesses’ ability 

to engage in national advertising or to 

advertise to a broad audience because 

mandatory fees may vary by location, as 

is often the case with franchisee costs 

and delivery costs.295 One commenter 

argued that the rule would require 

either impractical and challenging geotargeted advertising or advertising a 

‘‘maximum total price’’ to any potential 

consumer in the businesses’ footprint, 

which would overstate the price that 

most consumers need to pay and defeat 

comparison shopping.296 The 

commenter also noted that 

‘‘[a]lternatively, companies might 

respond to the proposed rule by 

omitting pricing from advertising 

altogether, an option that would defeat 

the [Commission’s] goal of ensuring 

consumers have access to accurate and 

reliable cost information as they shop 

for services.’’297

The Commission determines that 

shipping charges may be excluded from 

total price. As to other charges that may 

vary by time or location, businesses can 

comply with the rule by advertising a 

maximum total price either by region or 

nationwide. The Commission 

understands that many businesses 

already engage in regional or geotargeted advertising that enables 

flexibility for pricing by time and 

locality. Since the rule applies to all 

businesses offering covered goods or 

services, it levels the playing field and 

preserves comparison-shopping even 

when advertised prices are maximum 

totals. 

(e) Rebates, Bundled Pricing, and Other 

Discounts: Compliance When 

Promotional Pricing Models Have 

Different Fees 

Promotional pricing models, such as 

two-for-one deals, bulk or bundled 

pricing, unbundled or a la carte pricing, 

rebates, or other discounts, can change 

the price a consumer ultimately may 

pay. Section 464.2(a)’s total price 

disclosure requirement applies whether 

a consumer is purchasing a single 

covered good or service, multiple 

covered goods or services, or covered 

goods or services combined with 

ancillary goods or services, as well as 

when a discount or other promotion 

affects the final amount of payment. If 

a consumer applies a discount or 

otherwise qualifies for a promotional 

price, the business can update the total 

price displayed. The Commission 

provides clarification herein to address 

commenter concerns about the rule as it 

applies to promotional pricing models. 

Some commenters expressed concern 

that the rule’s total price requirement 

would prohibit or discourage businesses 

from offering promotional prices to 

consumers.298 Two industry groups 

commented that the potential difficulty 

of incorporating promotions into total 

price might discourage businesses from 

offering them.299 A competition policy 

group agreed and suggested 

modifications might be ‘‘necessary to 

ensure that the proposed rules do not 

interfere with such pricing models.’’ 300

The Antitrust Division of the U.S. 

Department of Justice commented that 

‘‘[c]ompetition between companies that 

offer bundled and unbundled pricing for 

core products and value-added features 

can play an important role in preserving 

consumer choice . . . and unbundled 

pricing can empower consumers who 

prefer to pay only for what they 

value.’’ 301 The Antitrust Division 

further commented that the proposed 

rule ‘‘does not affect companies’ ability 

to offer consumers a choice whether to 

buy unbundled features that do not 

impose mandatory fees.’’ 302 However, it 

asserted that ‘‘[w]hen companies use 

unbundled offerings to disguise 

mandatory fees, they undermine the 

value to competition of that unbundled 

option.’’ 303

The rule does not prohibit businesses 

from using bundled, discount, or similar 

pricing models if, when the business 

advertises any price of a covered good 

or service, it discloses the total price the 

consumer must pay for the good or 

service. The rule also does not require 

businesses to incorporate different 

pricing models into a single price; 

rather, under the rule, businesses 

advertising any price of a covered good 

or service must only display the 

maximum total price. For example, a 

hotel can display a regular total price 

and a loyalty program member total 

price. Businesses also can display total 

price under a promotional pricing 

model, such as a bundled price or a 

promotion advertising, ‘‘stay three 

nights, get one night free,’’ when and to 

the extent that model applies. The 

Commission notes that offering, 

displaying, or advertising a general [x]% 

or $[y] discount, without displaying the 

price of a covered good or service, does 

not require the disclosure of total price 

under the rule. 


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304See, e.g., FTC–2023–0064–3258 (National 

Taxpayers Union Foundation stated that Total Price 

may be difficult or impossible to implement with 

third-party marketplaces because ‘‘while the 

platform may control the display of prices, it is 

sellers and not the platform that sets [sic] the 

prices.’’); FTC–2023–0064–3293 (Travel Technology 

Association stated that intermediaries may be 

‘‘similarly situated to consumers in that they are 

also dependent on Travel Service Providers such as 

hotels to provide accurate, complete, and timely 

information before booking.’’); FTC–2023–0064– 

3262 (Skyscanner Ltd. highlighted ‘‘the numerous 

and complex ways in which metasearch sites 

receive pricing information directly from hotels and 

other short-term lodging providers’’). 

305FTC–2023–0064–3293 (Travel Technology 

Association). 

306 Id. 

307 Id. 

308FTC–2023–0064–3293 (Travel Technology 

Association); FTC–2023–0064–3262 (Skyscanner 

Limited). 

309 Id. 

310FTC–2023–0064–3293 (Travel Technology 

Association). 

311FTC–2023–0064–3094 (American Hotel & 

Lodging Association). 

312 Id. 

313FTC–2023–0064–3294 (International 

Franchise Association). 

314 Id. 

315See, e.g., Complaint ¶¶ 1–7, 13–87, FTC v. 

Arise Virtual Solutions, Inc., No. 24–cv–61152 (S.D. 

Fla. July 2, 2024), https://www.ftc.gov/system/files/ 

ftc_gov/pdf/arise_complaint.pdf (alleging 

Continued 

(f) Online Marketplaces 

The rule covers sellers and online 

marketplace platforms or other 

intermediaries in the same manner as 

other businesses that offer covered 

goods or services. Various commenters, 

however, highlighted the challenges 

some businesses may face in 

implementing the rule if it is applied 

equally to all online marketplace 

stakeholders. The Commission’s review 

of the comments, as discussed herein, 

did not identify any persuasive reason 

to change the rule as it applies to online 

marketplaces for covered goods or 

services. 

Some commenters stated that certain 

businesses offering, displaying, or 

advertising goods and services in an 

online marketplace often must rely on 

other entities for accurate information 

about pricing and expressed concern 

about liability under the rule if they 

receive inaccurate pricing information. 

This concern arose both from 

intermediaries that display prices 

provided by sellers and from sellers 

who offer their goods or services 

through an intermediary. Intermediaries 

are concerned about facing liability if 

they post prices that are inaccurate 

because the seller of the good or service 

did not provide complete and accurate 

pricing information. Commenters also 

expressed concern about liability when 

sellers list their good or service for sale 

on a platform but are not in control of 

how the platform displays information 

about pricing.304

Travel Technology Association 

(‘‘Travel Tech’’), for instance, observed 

the complex and multi-layered 

information flow from travel service 

providers, such as hotels, motels, inns, 

vacation rentals, and other short-term 

lodging providers, to different types of 

intermediaries which operate either as 

business-to-business, consumer-facing, 

or both, and include online travel 

agents, metasearch engines, global 

distribution systems, travel management 

companies, short-term rental platforms, 

‘‘brick-and-mortar’’ or offline travel 

agents, tour operators, and 

wholesalers.305 Travel Tech explained 

that travel service providers determine 

the rates, terms, and mandatory fees, 

including resort fees, applicable to their 

travel services, and that only travel 

service providers know whether the 

nature and purpose of any fee they 

impose is accurate.306 Travel Tech 

members, which consist of the 

aforementioned intermediaries, use the 

information provided to them directly 

from travel service providers, or 

indirectly through other intermediaries, 

to aggregate, sort, and display offers on 

their sites and applications, and 

consumers in turn use this information 

to compare offers and make informed 

choices.307 Travel Tech and one of its 

members, Skyscanner, a metasearch 

engine, suggested that the rule should 

immunize intermediaries from liability 

if travel service providers or other 

upstream distributors ‘‘fail to provide 

accurate, complete, and timely pricing 

information and such downstream 

[i]ntermediaries have made reasonable 

efforts to receive such information.’’ 308

Both commenters further requested that 

the Commission make clear that travel 

service providers would be engaging in 

an unfair or deceptive practice if they 

provide inaccurate, incomplete, or 

untimely pricing information to 

intermediaries or seek remuneration 

from intermediaries for information 

necessary for them to comply with any 

final rule.309 Finally, Travel Tech 

further requested that the Commission 

clarify that the rule applies to any 

business that supplies or advertises 

pricing to consumers so all are held to 

the same standard.310

The American Hotel & Lodging 

Association, a national association 

representing all segments of the U.S. 

lodging industry, including hotel 

owners, beds & breakfasts, State hotel 

associations, and industry suppliers, 

also stressed that a final rule must apply 

broadly to all industry participants, 

including online travel agencies, shortterm rental platforms, and metasearch 

sites.311 The commenter noted that the 

industry broadly is moving to 

implement the clear publishing of total 

price (including all mandatory, nongovernment fees) for lodging, so that 

consumers can more easily navigate the 

myriad of choices they have when it 

comes to places to stay.312

The Commission declines to adopt 

blanket immunity from the rule for 

intermediaries that depend on providers 

of live-event tickets and short-term 

lodging for accurate pricing information. 

The Commission, clarifies, however, 

that the final rule applies to business-tobusiness (‘‘B2B’’) transactions as well as 

business-to-consumer transactions. 

Businesses such as travel service 

providers that sell or advertise through 

intermediaries must provide such 

entities with accurate pricing 

information (including about total price, 

as well as mandatory and optional fees). 

Platforms and other intermediaries that 

offer, display, or advertise covered 

goods or services and ancillary goods or 

services or allow third party sellers to 

do so must disclose the total price of the 

goods and services, including all 

mandatory and optional fees and, if 

applicable, provide third-party sellers 

with all necessary information to 

calculate the total price. The rule’s 

coverage of B2B transactions in this 

manner protects not only individual 

consumers from hidden and misleading 

fees, but also businesses. 

The Commission also notes that at 

least one commenter, the International 

Franchise Association, argued that the 

rule should exempt B2B transactions, 

without providing any compelling 

justification for why bait-and-switch 

pricing, including drip pricing, and the 

misrepresentation of fees and charges 

should be allowed in transactions 

involving businesses.313 This 

commenter noted that, for example, 

‘‘[f]ranchised hotels advertise large 

event spaces for consumers’ weddings 

and business conventions’’ and the rule 

‘‘could be applied against these 

businesses if they fail to display total 

price even though no consumer is ever 

misled or deceived.’’ 314 The prohibition 

in section 5 of the FTC Act against 

unfair or deceptive acts or practices 

does not include any limitation on the 

‘‘consumers’’ who can be injured. 

Relying on this authority, the 

Commission has long interpreted the 

FTC Act to apply to cases where the 

harmed consumers are businesses, 

particularly small- and medium-sized 

businesses.315


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defendants made misleading and unsubstantiated 

earnings claims in selling its Arise business 

opportunity to gig worker consumers seeking to 

work from home in customer service and failed to 

provide the disclosures required by the Business 

Opportunity Rule); Complaint ¶¶ 7–51, In re 

Amazon.com, Inc., 171 F.T.C. 860, 861–71 (2021), 

https://www.ftc.gov/system/files/ftc_gov/pdf/ 

DV171.pdf (alleging defendants deceptively 

claimed they would give their Amazon Flex drivers 

100% of consumer tips when in fact they withheld 

nearly a third of the tips from their drivers); 

Complaint ¶¶ 13–65, FTC v. First American 

Payment Systems, LLC, No. 4:22–cv–00654 (E.D. TX 

July 29, 2022), https://www.ftc.gov/system/files/ftc_

gov/pdf/Complaint%20%28file%20stamped%29_

0.pdf (alleging defendants made false claims about 

their payment processing services, including about 

total monthly fees, savings opportunities, and the 

ease of cancelling automatically-renewing accounts, 

to small business consumers such as restaurants, 

nail salons, or small retail businesses); Complaint 

¶¶ 12–50, FTC v. Yellowstone Capital LLC, No. 

1:20–cv–06023 (S.D.N.Y. Aug. 3, 2020), https://

www.ftc.gov/system/files/documents/cases/ 

1823202yellowstonecomplaint.pdf (alleging 

defendants engaged in a pattern of deceptive and 

unfair conduct involving their ‘‘merchant cash 

advances’’ to small business consumers and made 

excess, unauthorized withdrawals from consumers’ 

accounts after consumers already repaid the full 

amount they owed); Complaint ¶¶ 9–104, FTC v. 

Fleetcor Technologies, Inc., No. 1:19–cv–05727– 

ELR (N.D. Ga. December 20, 2019), https://

www.ftc.gov/system/files/documents/cases/fleetcor_

complaint_with_exhibits_002.pdf (alleging 

defendants marketed fuel cards to business 

consumers that operate vehicle fleets, including 

many small businesses and made false claims about 

the fuel card’s savings, fraud controls, and lack of 

set-up, transaction, and membership fees, instead 

charging these businesses hundreds of millions of 

dollars in unexpected fees); see also Fed. Trade 

Comm’n, Policy Statement on Enforcement Related 

to Gig Work (2022), https://www.ftc.gov/system/ 

files/ftc_gov/pdf/Matter%20No.%20P227600

%20Gig%20Policy%20Statement.pdf (noting that 

protecting gig workers ‘‘from unfair, deceptive, and 

anticompetitive practices is a priority,’’ and the FTC 

‘‘will use its full authority to do so’’). 

316See, e.g., FTC–2023–0064–3202 (TechNet 

stated: ‘‘The FTC’s proposed rule also poses 

significant harm to online marketplaces by 

potentially creating liability for platforms that 

merely display pricing advertised by others. As 

publishers, such platforms are likely protected from 

such responsibility by Section 230 of the 

Communications Decency Act of 1996.’’). 

317See, e.g., Fed. Trade Comm’n, Bureau of 

Consumer Protection Business Guidance, FTC 

Safeguards Rule: What Your Business Needs to 

Know (May 2022), https://www.ftc.gov/businessguidance/resources/ftc-safeguards-rule-what-yourbusiness-needs-know; Fed. Trade Comm’n, Bureau 

of Consumer Protection Business Guidance, FAQs: 

Complying with the Contact Lens Rule (June 2020), 

https://www.ftc.gov/business-guidance/resources/ 

faqs-complying-contact-lens-rule; Fed. Trade 

Comm’n, Bureau of Consumer Protection Business 

Guidance, Complying with the Funeral Rule (Aug. 

2012), https://www.ftc.gov/business-guidance/ 

resources/complying-funeral-rule. 

318See, e.g., FTC–2023–0064–3266 (StubHub, Inc. 

agreed with the FTC’s proposal to require Total 

Price in every offer, display, or advertisement 

presented to consumers and that Total Price must 

be consistently displayed throughout the 

transaction); FTC–2023–0064–3306 (Live Nation 

Entertainment and its subsidiary Ticketmaster 

North America supported ‘‘requir[ing] the first price 

for a live-event ticket shown to consumers to be the 

price ultimately charged at checkout (exclusive of 

state and local taxes and optional add-ons). This 

price should be clearly displayed on the initial 

landing page and easily discernible.’’ The 

commenter proposed adding the phrase, ‘‘from the 

first instance a consumer sees a price for a good or 

service’’ to the end of proposed § 464.2(a) and 

moving the phrase, ‘‘as soon as pricing information 

is provided to the consumer’’ before ‘‘more 

prominently than any other Pricing Information’’ in 

proposed § 464.2(b).); FTC–2023–0064–3290 (U.S. 

Public Interest Research Group Education Fund 

commented: ‘‘[T]he Total Price should be provided 

first and with the most prominence. Businesses 

must not be allowed to confuse consumers with a 

barrage of numbers.’’); FTC–2023–0064–1939 

(Tzedek DC). 

319See, e.g., FTC–2023–0064–3290 (U.S. Public 

Interest Research Group Education Fund); FTC– 

2023–0064–1939 (Tzedek DC commented that 

proposed § 464.2(b) ‘‘will prevent companies from 

hiding the real cost of goods and services in fine 

print or making the total cost difficult to find.’’). 

320See, e.g., FTC–2023–0064–3196 (South 

Carolina Department of Consumer Affairs 

commented: ‘‘Guidance on how the business can 

simultaneously comply with the ‘Clearly and 

Conspicuously’ requirement and the prominence 

requirement may help with business 

comprehension and compliance.’’ The commenter 

suggested adding ‘‘a definition addressing the 

different mediums by which the offer, display or 

advertisement may be relayed to a consumer 

(visual, audio, print, online)’’ and providing 

‘‘examples of compliance with the requirement of 

prominent display’’ such as ‘‘in a visual disclosure 

presentation of the Total Price in bolded typeface 

at least two points larger than any other Pricing 

Information or 14-point font, whichever is larger, 

satisfies the prominence requirement.’’). 

321See, e.g., FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice et al. 

suggested modifying proposed § 464.2(b) to include: 

‘‘[A] Business must not automatically include 

Ancillary Goods or Services in the Total Price or 

automatically select Ancillary Goods or Services for 

purchase on behalf of the consumer.’’); FTC–2023– 

0064–3160 (Consumer Federation of America et al. 

made a similar suggestion and stated it would 

‘‘ensure that ‘must pay’ is interpreted to include 

The Commission clarifies that it does 

not intend to treat intermediaries as the 

publisher or speaker of information 

about pricing or as controlling the 

manner of its display where the 

intermediary is not responsible, in 

whole or in part, for such content or 

display.316 However, if intermediaries 

are responsible, in whole or in part, for 

offering, displaying, or advertising any 

price, including any portion thereof, of 

a covered good or service, then within 

the scope of that responsibility, they 

must give sellers the information 

necessary to calculate total price and, 

when uniquely situated to do so, such 

intermediaries must ensure that they 

display total price. For example, if an 

intermediary charges a fee for access to 

its platform and the seller passes the fee 

through to consumers, the intermediary 

must provide the seller with accurate 

information about the fee’s amount so 

the seller can accurately calculate total 

price, or otherwise ensure that the total 

price is displayed. Travel service 

providers and other sellers, by the same 

token, must provide intermediaries with 

accurate price information. 

Whether an intermediary, seller, or 

other business is responsible for 

offering, displaying, or advertising a 

price of a covered good or service, may 

be a fact- and law-specific 

determination in which the Commission 

can consider issues of participation in, 

and control of, unfair or deceptive 

practices, as well as contractual 

obligations between sellers and 

platforms and other intermediaries, and 

the applicability of other Federal laws. 

The Commission will consider issuing 

and updating business guidance to 

address particular or nuanced scenarios, 

as it has done as a complement to other 

rulemakings.317

2. § 464.2(b) 

Proposed § 464.2(b) in the NPRM 

required businesses to display total 

price more prominently than any other 

pricing information in any offer, 

display, or advertisement that contains 

an amount a consumer may pay. 

Following review of the comments, the 

Commission finalizes § 464.2(b) with 

three modifications. First, as already 

discussed in this section, the 

Commission limits the requirements of 

§ 464.2, including § 464.2(b), to covered 

goods or services. Second, as discussed 

in section III.B.1, the Commission 

narrows the disclosure trigger in 

§ 464.2(a) and (b) to ‘‘an offer, display, 

or advertisement that represents any 

price of a covered good or service.’’ 

Third, as discussed herein, final 

§ 464.2(b) clarifies the prominence 

requirement with respect to the final 

amount of payment for a transaction. 

Final § 464.2(b) thus provides that, in 

any offer, display, or advertisement that 

represents any price of a covered good 

or service, a business must disclose the 

total price more prominently than any 

other pricing information. However, 

where the final amount of payment for 

the transaction is displayed, the final 

amount of payment must be disclosed 

more prominently than, or as 

prominently as, the total price. 

Various commenters voiced support 

for proposed § 464.2(b)’s requirement 

that total price must be displayed more 

prominently than other pricing 

information.318 Certain commenters 

stated that the prominence requirement 

will prevent consumer confusion as to 

the true price of a good or service.319

Some commenters suggested 

strengthening the prominence 

requirement or adding guidance about 

it.320 Other commenters also suggested 

clarifying that the phrase ‘‘an amount a 

consumer may pay’’ refers only to truly 

mandatory ancillary goods or 

services.321 On the other hand, some 


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any fee or charge that is included by default and 

that the consumer must pay unless they take 

affirmative action to opt-out or avoid it.’’ The 

commenter proposed adding guidance that: ‘‘A 

consumer must pay a fee or charge if the fee or 

charge is not reasonably avoidable or if the 

consumer must pay the fee or charge unless they 

take affirmative action to avoid it. An ancillary good 

or service is mandatory if a reasonable consumer 

would expect the good or service to be included 

with the purchase.’’). 

322See, e.g., FTC–2023–0064–3293 (Travel 

Technology Association commented that if Total 

Price is ‘‘clearly and conspicuously’’ displayed, a 

prominence requirement is unnecessary and 

‘‘discounts would have to be less prominent than 

the Total Price, potentially leading to a consumer 

missing out on a deal that may have saved them 

money or led to a more enjoyable vacation.’’ The 

commenter suggested that the rule be more flexible 

‘‘so that Intermediaries can use their expertise to 

relay the most appropriate information to 

consumers.’’); FTC–2023–0064–3296 (Bay Area 

Apartment Association commented that the 

prominence requirement could have a ‘‘chilling 

effect on the content of commercial speech,’’ with 

some rental housing providers choosing ‘‘not to 

include pricing information in their advertisements, 

and instead invite prospective residents to learn 

about pricing on their website or to call their 

leasing office,’’ thereby ‘‘undermining a key 

objective (better consumer awareness of the price of 

goods and service[s]) the rule is intended to 

accomplish.’’). 

323See also Bates v. State Bar of Ariz., 433 U.S. 

350, 383–84 (1977) (‘‘Since the advertiser knows his 

product and has a commercial interest in its 

dissemination, we have little worry that regulation 

to assure truthfulness will discourage protected 

speech.’’) (citing Va. State Bd. of Pharm. v. Va. 

Citizens Consumer Council, Inc., 425 U.S. 748, 771– 

772, 771 n. 24 (1976)). 

324FTC–2023–0064–3283 (National Consumer 

Law Center, Prison Policy Initiative, and advocate 

Stephen Raher). 

325See, e.g., FTC–2023–0064–3094 (American 

Hotel & Lodging Association asserted: ‘‘The 

language of the proposed rule is vague, overbroad, 

and not sufficiently specific to provide notice of 

what types of fees businesses are required to 

display . . . . Businesses could reasonably differ in 

their approaches to disclosing the ‘nature and 

purpose’ or ‘identity’ of such fees.’’); FTC–2023– 

0064–3133 (National Multifamily Housing Council 

and National Apartment Association commented 

that disclosing the nature and purpose of fees is 

‘‘impracticable’’ and requiring rental housing 

providers to furnish prospective tenants ‘‘with any 

fee or charge excluded from the total price that the 

customer may (or may not) have to pay at some 

point during the lease practically means housing 

providers will need to disclose all possible fees.’’); 

FTC–2023–0064–3263 (Flex Association asserted 

that the ‘‘requirement to disclose the ‘nature and 

purpose’ of a fee is vague’’ and ‘‘provide[s] no 

material benefit to consumers.’’); see also, FTC– 

2023–0064–2981 (Apartment & Office Building 

Association of Metropolitan Washington); FTC– 

2023–0064–3042 (Nevada State Apartment 

Association); FTC–2023–0064–3044 (San Angelo 

Apartment Association); FTC–2023–0064–3045 

(Chicagoland Apartment Association); FTC–2023– 

0064–3111 (Houston Apartment Association); FTC– 

2023–0064–3116 (Manufactured Housing Institute); 

FTC–2023–0064–3233 (NCTA—The internet & 

Television Association); FTC–2023–0064–3296 (Bay 

Area Apartment Association); FTC–2023–0064– 

3311 (Greater Cincinnati Northern Kentucky 

Apartment Association). 

326FTC–2023–0064–3094 (American Hotel & 

Lodging Association). 

327See, e.g., FTC–2023–0064–1425 (Iowa Bankers 

Association); FTC–2023–0064–3263 (Flex 

Association asserted that ‘‘[i]t appears that the 

Commission seeks to require disclosure of the 

business rationale for imposing a fee and the 

specific uses to which proceeds of a given fee will 

go,’’ which would require businesses to ‘‘divulge 

commercially sensitive information that could 

seriously alter competition in a given 

marketplace.’’). 

328See, e.g., FTC–2023–0064–2888 (Housing 

Policy Clinic, University of Texas School of Law). 

329See, e.g., Id.; FTC–2023–0064–2883 (District of 

Columbia, Office of the People’s Counsel); FTC– 

2023–0064–3146 (Institute for Policy Integrity, New 

York University School of Law). 

industry commenters stated that the 

prominence requirement may have 

unintended consequences that could 

harm consumers, such as consumers not 

noticing an offered discount or a 

business deciding not to provide any 

pricing information.322 As noted in 

section III.B.1.e, nothing in the rule 

prohibits a business from adjusting total 

price to account for any applied 

discounts or other promotional pricing 

and, given strong market incentives, the 

Commission disagrees with comments 

that the rule’s prohibitions against 

hidden and misleading fees will deter 

businesses from advertising prices.323

Final § 464.2(b) also clarifies how the 

prominence requirement applies to the 

final amount of payment for a 

transaction. The Commission recognizes 

that the final amount of payment, now 

an explicitly required disclosure under 

final § 464.2(c), may differ from total 

price due to various factors, such as the 

exclusion from total price of certain fees 

or charges, including for any optional 

ancillary good or service, or the 

application of promotional pricing 

models. The Commission determines 

that both total price and the final 

amount of payment are material to 

consumers. The Commission therefore 

clarifies that, when the final amount of 

payment is displayed, it must be 

displayed as prominently as, or more 

prominently than, total price. The 

modification avoids a potential 

unintended consequence of the rule, 

which may have been read to require 

total price to obscure the final amount 

of payment. 

The Commission determines that, 

with these modifications, § 464.2(b)’s 

prominence requirement is clear, 

understandable, and unambiguous. 

3. § 464.2(c) 

In final § 464.2, the Commission 

consolidates all proposed disclosure 

requirements; therefore, proposed 

§ 464.3(b) is codified at final § 464.2(c). 

Proposed § 464.3(b) would have 

required businesses to disclose clearly 

and conspicuously, before the consumer 

consents to pay, the nature and purpose 

of any amount a consumer may pay that 

is excluded from total price, including 

the fee’s refundability and the identity 

of the good or service for which the fee 

is charged. Final § 464.2(c) largely 

adopts the disclosure requirements of 

proposed § 464.3(b), with certain 

modifications. Specifically, final 

§ 464.2(c) requires businesses to 

disclose clearly and conspicuously, 

before the consumer consents to pay for 

any covered good or service: The nature, 

purpose, and amount of any fee or 

charge imposed on the transaction that 

has been excluded from total price and 

the identity of the good or service for 

which the fee or charge is imposed, but 

not the fee’s refundability; and the final 

amount of payment for the transaction. 

The Commission makes these 

modifications, as discussed herein, in 

response to the comments and to 

address related concerns. One 

commenter recommended that the 

Commission provide greater specificity 

about which fees excluded from total 

price must be disclosed under this 

provision, and require the itemized 

disclosure of such fees.324 Some 

commenters argued that the provision 

was vague and overbroad, and that its 

application to ‘‘any amount a consumer 

may pay’’ would make complying with 

the provision impracticable and result 

in excessive disclosures that would 

confuse consumers into believing that 

all disclosed fees apply to them when 

they might not.325 One commenter 

recommended that the rule allow the 

required disclosures to be made at the 

time goods or services are selected.326

Commenters argued that requiring 

businesses to explain how fees will be 

used is not reasonable and may require 

the disclosure of confidential, 

proprietary, or commercially sensitive 

information, such as the business 

rationale for imposing fees and the 

specific uses to which businesses put 

fees.327 Other commenters 

recommended that the rule require the 

disclosure of the optional nature of 

optional fees 328 and regulate opt-in and 

opt-out procedures for fees.329

The Commission modifies the NPRM 

proposal so that final § 464.2(c) requires 

businesses to disclose separately the 

amount, as well as the nature and 

purpose, of each fee or charge imposed 

on the transaction for the covered good 

or service that is excluded from total 

price, and the final amount of payment, 

before the consumer consents to pay. 

The Commission determines that these 

modifications are necessary for price 

transparency and to protect consumers 

who would reasonably expect to know 

the nature, purpose, and amount of fees 

they will have to pay, as well as the 


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330FTC–2023–0064–3160 (Consumer Federation 

of America et al.). 

331See, e.g., FTC–2023–0064–3160 (Consumer 

Federation of America et al.); FTC–2023–0064–3146 

(Institute for Policy Integrity, New York University 

School of Law); FTC–2023–0064–3283 (National 

Consumer Law Center, Prison Policy Initiative, and 

advocate Stephen Raher); FTC–2023–0064–3191 

(Community Catalyst et al.). 

332As noted supra section III.B, the Commission 

redesignates proposed § 464.3(b) as final § 464.2(c) 

to consolidate all provisions related to disclosures 

in final § 464.2. 

333FTC–2023–0064–3215 (Attorneys General of 

the States of North Carolina and Pennsylvania, 

along with Attorneys General of the States or 

Territories of Arizona, Colorado, Connecticut, 

Delaware, District of Columbia, Hawaii, Illinois, 

Maine, Michigan, Minnesota, New Jersey, New 

York, Oklahoma, Oregon, Vermont, Washington, 

and Wisconsin stated: ‘‘[C]harges that misrepresent 

their nature and purpose are unfair and deceptive 

because they mislead consumers and make it more 

difficult for truthful businesses to compete on 

price.’’ The Attorneys General asserted that ‘‘this 

provision is another straightforward, commonsense 

approach that should not significantly burden 

businesses.’’). 

334See, e.g., FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice et al. 

asserted: ‘‘Prohibiting misrepresentation of the 

final amount of payment, before they 

consent to pay. 

To provide clarification and address 

commenter concerns about potential 

overbreadth and vagueness, the 

Commission narrows the NPRM 

proposal so that final § 464.2(c) requires 

the disclosures in connection with ‘‘any 

fee or charge imposed on the transaction 

that has been excluded from total price’’ 

instead of ‘‘any amount a consumer may 

pay.’’ The provision therefore requires 

the disclosure, before the consumer 

consents to pay, of the nature, purpose, 

and amount of government charges, 

shipping charges, and any other fee or 

charge, such as for optional ancillary 

goods or services, that permissibly were 

excluded from total price but are being 

imposed on the transaction. 

Final § 464.2(c) also explicitly 

requires disclosure of ‘‘the final amount 

of payment for the transaction,’’ as that 

amount may differ from total price due 

to, for example, the application of 

promotional pricing or the addition of 

any fees or charges permissibly 

excluded from total price, including for 

any optional ancillary goods or services. 

Where the final amount of payment is 

displayed, as discussed in section 

III.B.2, final § 464.2(b) requires it to be 

at least as prominent as, or more 

prominent than, total price. 

In most instances, the disclosure 

about the nature, purpose, and amount 

of the excluded charge or fee will be 

minimal. For example, using the 

defined term ‘‘shipping charges’’ is 

likely to convey the nature and purpose 

of such charges. For government 

charges, a phrase like ‘‘sales tax’’ or 

‘‘hotel occupancy tax’’ would convey 

the nature and purpose of an imposed 

sales tax or hotel occupancy tax. 

Similarly, in most instances, simply 

identifying the ancillary good or service 

for which a charge applies, such as 

‘‘valet parking,’’ will sufficiently convey 

the nature and purpose of the charge. 

Some commenters observed that the 

timing of ‘‘before the consumer consents 

to pay’’ is unclear. One commenter 

cautioned that the language of the rule 

may open the door to the types of baitand-switch pricing that the total price 

disclosure requirement is meant to 

prevent.330 Other commenters 

recommended that the Commission 

clarify the meaning of the phrase 

‘‘before the consumer consents to pay’’ 

and the timing of the required 

disclosures, for example, by specifying 

that it means before businesses obtain 

consumers’ billing information.331

The Commission clarifies that, 

although when a consumer consents to 

pay may depend on the facts and 

circumstances surrounding the 

transaction, § 464.2(c) requires 

businesses to clearly and conspicuously 

disclose the nature, purpose, and 

amount of any fees or charges imposed 

on the transaction that have been 

excluded from total price and the 

identity of the good or service for which 

the fee or charge is imposed, as well as 

the final amount of payment for the 

transaction, before consumers are 

required to pay cash or provide their 

payment information. The Commission 

notes that a default setting that 

automatically opts-in consumers to pay 

for goods or services does not constitute 

consent to pay nor does it satisfy 

§ 464.2(c)’s disclosure requirements. 

As part of final § 464.2(c), the 

Commission does not adopt the NPRM’s 

proposed requirement to affirmatively 

disclose each fee’s refundability. The 

Commission determines that requiring 

clear and conspicuous disclosure of 

each fee’s refundability may be 

impractical for businesses and 

confusing to consumers due to extensive 

qualifications or other requirements for 

refunds. Such extensive, itemized 

disclosures may impede the 

Commission’s goal of ensuring 

consumers receive clear and accurate 

pricing information. However, the 

Commission finalizes § 464.3’s 

prohibition on misrepresenting a fee’s 

refundability. 

C. § 464.3 Misleading Fees Prohibited 

Both practices that the Commission 

identified in the NPRM as unfair or 

deceptive involve misleading practices: 

(1) bait-and-switch pricing that hides 

the total price of goods or services by 

omitting mandatory fees from advertised 

prices, including through drip pricing, 

and (2) misrepresenting the nature, 

purpose, amount, and refundability of 

fees or charges. Proposed § 464.3(a) 

would have prohibited any business 

from misrepresenting the nature and 

purpose of any amount a consumer may 

pay, including the refundability of such 

fees and the identity of any good or 

service for which fees are charged.332

The Commission finalizes proposed 

§ 464.3(a) in § 464.3 with some 

modifications. Specifically, final § 464.3 

prohibits any business, in any offer, 

display, or advertisement for a covered 

good or service, from misrepresenting 

any fee or charge, including its nature, 

purpose, amount or refundability, and 

the identity of the good or service for 

which it is imposed. The Commission 

adds the phrase ‘‘covered goods or 

services’’ to reflect the narrower scope 

of the final rule. The Commission also 

adds ‘‘amount’’ to ‘‘nature’’ and 

‘‘purpose,’’ and clarifies that the 

prohibited misrepresentations concern 

‘‘any fee or charge’’ instead of ‘‘any 

amount a consumer may pay.’’ This 

modified provision makes plain that, in 

connection with covered goods or 

services, businesses cannot 

misrepresent the nature, purpose, 

amount, or refundability of any fee or 

charge, including government charges, 

shipping charges, any fees or charges for 

optional ancillary goods or services, or 

any mandatory fees or charges. In 

making these modifications, the 

Commission has considered 

recommendations and alternatives 

suggested in NPRM comments, 

discussed herein. 

The Commission noted in the NPRM 

that it had received comments in 

response to the ANPR stating that sellers 

often misrepresent the nature or 

purpose of fees, leaving consumers 

wondering what they are paying for, 

believing fees are arbitrary, or 

concerned that they are getting nothing 

for the fees charged. The Commission 

received similar comments in response 

to the NPRM. 

The Attorneys General of nineteen 

States and the District of Columbia 

commented that fee misrepresentations 

‘‘mislead consumers and make it more 

difficult for truthful businesses to 

compete on price.’’ 333 Commenters 

supported prohibiting fee 

misrepresentations because truthful 

information benefits both consumers 

and businesses.334 A commenter 


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identity and nature of fees further serves the 

Commission’s mandate to promote fair business 

practices and competition.’’); FTC–2023–0064–2892 

(Community Legal Services of Philadelphia stated 

that the rule’s ‘‘prohibition on misrepresentation 

regarding the nature and cost of fees would also be 

extremely beneficial for low-income renters, who 

often face inflated fees that can contribute to 

housing insecurity.’’); FTC–2023–0064–3268 

(Housing and Eviction Defense Clinic, University of 

Connecticut School of Law stated: ‘‘Prohibiting 

misleading fees will not only properly inform the 

tenants of the charges but also hold the landlords 

accountable for their fees.’’). 

335FTC–2023–0064–3283 (National Consumer 

Law Center, Prison Policy Initiative, and advocate 

Stephen Raher stated that § 464.3(a) should make 

clear that it prohibits misrepresentations regarding 

any amount included in Total Price as well as any 

other fee or charge the consumer may pay, 

including ‘‘Shipping Charges, Government Charges, 

fines, penalties, optional charges, voluntary 

gratuities, and invitations to tip,’’ and proposed 

adding specific text to that effect.). 

336See, e.g., FTC–2023–0064–3268 (Housing & 

Eviction Defense Clinic, University of Connecticut 

School of Law stated that rental fees may be ‘‘for 

something the landlord/property manager cannot 

explain.’’); FTC–2023–0064–3283 (National 

Consumer Law Center, Prison Policy Initiative, and 

advocate Stephen Raher stated the rule should 

clarify that descriptions of fees which are not 

understandable to reasonable consumers 

misrepresent their nature and purpose.); FTC– 

2023–0064–3275 (Berkeley Center for Consumer 

Law & Economic Justice et al. cited research 

showing that ‘‘many businesses characterize their 

hidden and unexpected fees using vague or 

anodyne language that fails to succinctly explain to 

the consumer exactly what the fee is for.’’). 

337See, e.g., FTC–2023–0064–1939 (Tzedek DC 

expressed support for the misleading fees provision 

because it ‘‘will prevent companies from making 

misleading claims about a fee, in example, a 

company charging a ‘staff service fee’ that does not 

go to employees.’’); FTC–2023–0064–3106 

(American Society of Travel Advisors noted: 

‘‘While admittedly there is no universally accepted 

industry definition of what constitutes a ‘resort,’ 

hotels offering only typical or ordinary 

accommodations and/or amenities but nevertheless 

characteriz[ing] their fees as such misrepresent the 

nature of the property being booked.’’); FTC–2023– 

0064–3275 (Berkeley Center for Consumer Law & 

Economic Justice et al. identified ‘‘environmental 

fees’’ as one example of fees that may ‘‘serve[ ] no 

apparent environmental sustainability or 

conservation purpose.’’). 

338See, e.g., FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice et al. 

stated that ‘‘environmental’’ fees ‘‘are likely 

designed to trick consumers into thinking that the 

added cost is either a government-imposed tax to 

protect the environment, or a salutary contribution 

to somehow ‘offset’ any negative environmental 

impact caused by the good or service’’ when they 

may be ‘‘charged simply to boost a business’s 

profits.’’); FTC–2023–0064–3106 (American Society 

of Travel Advisors noted that ‘‘use of terms such as 

‘destination fee’ . . . will inevitably mislead many 

consumers into mistakenly believing that it 

represents a tax or government surcharge that must 

be collected from the consumer and passed on to 

a local jurisdiction.’’). 

339See, e.g., FTC–2023–0064–3275 (Berkeley 

Center for Consumer Law & Economic Justice et al. 

argued that the rule could be strengthened by 

clarifying that the misleading fees provision applies 

to mandatory and optional fees.); FTC–2023–0064– 

3160 (Consumer Federation of America et al. stated 

that the FTC should make clear that the misleading 

fees provision applies to mandatory and optional 

fees.). 

340FTC–2023–0064–3212 (TickPick, LLC argued: 

‘‘Due to the arbitrary nature of the components that 

make up the Total Price of a ticket, any secondary 

ticketing marketplace that itemizes mandatory fees 

and charges is arguably misrepresenting the ‘nature 

and purpose of any amount a consumer may pay.’ ’’ 

The commenter proposed that the Commission 

‘‘define any breakdown of the amounts that a 

consumer may pay as a representation that requires 

adequate substantiation.’’). 

341See, e.g., FTC–2023–0064–3102 (Corporation 

for Supportive Housing noted that landlords and 

property managers may collect ‘‘fees for services 

that were not performed (e.g., running a background 

check, credit check), [and] charg[e] fees in excess 

of the actual amount to perform the service/run the 

check to generate profit.’’); FTC–2023–0064–3278 

(Southeast Louisiana Legal Services noted that lowincome renters face unfair and deceptive fees 

during residential leases that are ‘‘frequently for 

services not rendered.’’ The commenter further 

noted: ‘‘Without any restrictions on hidden or 

misleading fees, landlords are free to use rental 

applications as an independent source of profit for 

which there may be no real service provided.’’); 

FTC–2023–0064–1431 (McPherson Housing 

Coalition stated that rental housing applicants who 

pay application fees and do not get approved lose 

their money.); FTC–2023–0064–2862 (Legal Aid 

Foundation of Los Angeles gave as examples of 

misleading fees a repairs fee when the landlord is 

legally obligated to provide the repairs and a 

parking fee when the tenant does not have or park 

a car.); FTC–2023–0064–2920 (Colorado Poverty 

Law Clinic stated, ‘‘we often see fees added for 

services that the tenant does not receive, or that are 

basic services that should only reasonably be 

included in the tenant’s monthly rent,’’ such as for 

common area maintenance or utilities.); FTC–2023– 

0064–3242 (William E. Morris Institute for Justice 

expressed concern that ‘‘housing providers and 

landlords are charging junk fees untethered to any 

real cost or business expense . . . or to any value 

or benefit delivered to rental housing applicants.’’). 

342See, e.g., FTC–2023–0064–3106 (American 

Society of Travel Advisors noted that ‘‘even where 

use of the term ‘resort’ to describe the property may 

be warranted, often the amount of the fee collected 

appears arbitrary and bears no relationship to the 

value of the services purportedly being provided.’’); 

FTC–2023–0064–3278 (Southeast Louisiana Legal 

Services commented that rental housing providers 

charge misleading fees when ‘‘they do not appear 

to correspond to the cost of service provided’’ or are 

vaguely identified, such as an ‘‘administrative fee’’ 

that causes ‘‘confusion for tenants who believe it to 

be a security deposit.’’); FTC–2023–0064–3253 

(Fortune Society commented that ‘‘application fees 

often do not reflect the actual costs of submitting 

a rental application.’’). 

343See, e.g., FTC–2023–0064–3094 (American 

Hotel & Lodging Association). 

344 Given the prevalence of the defined unfair or 

deceptive practices regarding the misrepresentation 

Continued 

recommended that the Commission 

clarify that the provision includes 

misrepresentations about fees included 

in total price and fees excluded from 

total price.335

Commenters stated that businesses 

misrepresent fees by using language that 

is vague and not understandable to 

consumers,336 and provided examples 

of various types of misrepresentations 

about the nature and purpose of fees, 

such as ‘‘service’’ fees that may not go 

to service employees, ‘‘environmental’’ 

fees that may not have an environmental 

purpose, ‘‘resort’’ fees for ordinary 

accommodations or amenities,337 and 

fees misrepresented as government 

charges.338 Commenters also stated that 

businesses may misrepresent the 

mandatory or optional nature of fees, or 

their amount, and recommended that 

the Commission clarify that prohibiting 

misrepresentations about the nature and 

purpose of fees includes 

misrepresentations about their 

mandatory or optional nature.339

Another commenter argued that 

businesses can misrepresent fees when 

they itemize mandatory fees that are 

arbitrary and are not for identified goods 

or services, and recommended that the 

Commission clarify that businesses 

must have adequate substantiation for 

itemized fees.340 Commenters also 

argued that businesses misrepresent fees 

when they do not provide the goods or 

services for which fees are charged or 

provide nothing of value,341 and when 

fees fail to reflect the cost of the goods 

or services provided.342

The American Hotel & Lodging 

Association and other commenters 

described the misleading fees provision 

as unnecessary given the Commission’s 

existing authority under section 5 of the 

FTC Act to police misleading fees.343 It 

is true that section 5, which prohibits 

unfair or deceptive practices, has long 

been used to protect against 

misrepresentations regarding material 

terms of a transaction, including price. 

False claims about fees or charges, as 

well as those claims that lack a 

reasonable basis, are inherently likely to 

mislead. However, the Commission 

disagrees with commenters’ contentions 

that the rule’s prohibitions on 

misrepresentations are unnecessary 

given the existing section 5 authority. 

As explained in section V, the final rule 

is necessary to: (1) ensure all businesses 

offering covered goods or services are 

held to the same standard so that 

consumers can effectively comparison 

shop; (2) level the playing field for these 

businesses so that they can compete 

based on truthful pricing information; 

and (3) increase deterrence by allowing 

courts to impose civil penalties and 

enabling the Commission to more 

readily obtain redress and damages for 

consumers through section 19(b) of the 

FTC Act. As it has become increasingly 

common for businesses offering covered 

goods or services to charge or itemize 

discrete fees over the course of a 

transaction, a specific prohibition on 

pricing misrepresentations is necessary 

to ensure consumers receive truthful 

information about the charges and fees 

they incur, and businesses are able to 

compete based on truthful 

information.344


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of total costs and the nature and purpose of fees, 

the Commission finds that it is necessary to require 

both affirmative disclosures and a prohibition of 

misrepresentations, instead of limiting the rule to 

prohibiting misrepresentations. See supra Parts II.A 

and II.B. 

345See, e.g., FTC–2023–0064–3094 (American 

Hotel & Lodging Association); FTC–2023–0064– 

3206 (Motor Vehicle Protection Products 

Association et al.). 

346NPRM, 88 FR 77434. 

347NPRM, 88 FR 77432; Deception Policy 

Statement, 103 F.T.C. 110, 175, 182–183, 183 n.55 

(listing, respectively, ‘‘misleading price claims’’ 

among those that the FTC has found to be 

deceptive, and claims or omissions involving cost 

among those that are presumptively material); see 

also FTC v. FleetCor Techs, Inc., 620 F. Supp. 3d 

1268, 1303–04 (N.D. Ga. 2022) (finding that 

representations about transaction fees and 

discounts were material). 

348As the Commission noted in the NPRM, if a 

delivery application includes an invitation to tip a 

delivery driver without disclosing that a portion of 

the tip is allocated to offset the delivery driver’s 

base wages or benefits, it would violate § 464.3 in 

addition to other laws or regulations relating to the 

distribution of tips. See Complaint ¶¶ 50–51, In re 

Amazon.com, Inc. (‘‘Amazon Flex’’), No. C–4746 

(FTC June 9, 2021) (alleging respondents falsely 

represented that 100% of tips would go to the 

driver in addition to the pay respondents offered 

drivers). 

349See discussion of optional and mandatory fees 

supra Parts III.A.1 and III.A.8.a; see also, e.g., Fed. 

Trade Comm’n, Bringing Dark Patterns to Light: 

Staff Report 9, 15, 15 n.122, 22 (stating ‘‘companies 

must not mislead consumers to believe that fees are 

mandatory when they are not’’ and describing the 

use of pre-selected checkboxes as a dark pattern 

that tricks consumers into buying unwanted goods 

and services) (Sept. 2022), https://www.ftc.gov/ 

system/files/ftc_gov/pdf/P214800%20Dark%

20Patterns%20Report%209.14.2022%20- 

%20FINAL.pdf; Stipulated Order for Permanent 

Injunction, Monetary Judgment, and Other Relief as 

to Defendants Rhinelander Auto Grp. LLC, et al., 

FTC v. Rhinelander Auto Ctr., Inc., No. 3:23–cv– 

00737–wmc (W.D. Wis. Nov. 6, 2023) (settling 

allegations that defendants misrepresented that 

consumers were required to purchase add-on 

products to purchase, lease, or finance a vehicle 

and, among other provisions, enjoining defendants 

from misrepresenting whether charges, products, or 

services are optional or required), https://

www.ftc.gov/system/files/ftc_gov/pdf/18- 

ConsentJudgmentEnteredastoRAGRMGand

Towne.pdf. 

350See, e.g., cases cited supra note 111. 

351FTC–2023–0064–3094 (American Hotel & 

Lodging Association). 

352FTC–2023–0064–3293 (Travel Technology 

Association). 

353FTC–2023–0064–3108 (Christian L. Castle, 

Esq.; Mala Sharma, President, Georgia Music 

Partners; and Dr. David C. Lowery, founder of 

musical groups Cracker and Camper Van 

Other commenters described the 

misrepresentations provision as vague 

and overbroad.345 The Commission 

carefully considered comments that 

suggested the language proposed in the 

NPRM prohibiting misrepresentations 

lacked specificity and was vague or 

overbroad, particularly the phrase ‘‘any 

amount a consumer may pay.’’ In final 

§ 464.3, the Commission modifies the 

NPRM proposal to replace ‘‘any amount 

a consumer may pay’’ with a reference 

to ‘‘any fee or charge.’’ In the NPRM, the 

Commission stated that ‘‘[o]ther 

characteristics included in the nature 

and purpose of a charge, such as the 

amount of the charge and whether it is 

refundable, are also material.’’ 346 To 

elaborate on this point in the final rule 

text, the Commission specifies that the 

‘‘amount’’ of any fee or charge cannot be 

misrepresented. Taken together, these 

modifications provide clarity to 

businesses that they cannot 

misrepresent the nature, purpose, 

amount, or refundability of any fee or 

charge excluded from total price, 

including government charges, shipping 

charges, any fees or charges for optional 

ancillary goods or services, or any other 

itemized or totaled fee or charge, 

including total price and the final 

amount of payment. 

Final § 464.3 prohibits 

misrepresentations about material 

pricing terms of a transaction. The 

nature, purpose, amount, and 

refundability of fees or charges and the 

identity of the good or service for which 

they are imposed are material 

characteristics that affect the value to 

consumers of the covered goods or 

services being offered and businesses’ 

ability to compete on price. As the 

Commission noted in the NPRM, 

whether a consumer is required to pay 

a charge, the amount of the charge, and 

what goods or services they will receive 

in exchange for the charge, is 

necessarily material information that 

affects a consumer’s choice about 

whether to consent to a charge.347 Other 

characteristics included in the nature, 

purpose, and amount of a charge, such 

as whether it is refundable, are also 

material. 

Under final § 464.3, businesses cannot 

misrepresent the nature, purpose, 

amount, or refundability of fees or 

charges and the identity of the goods or 

services for which they are imposed.348

For example, it would be a 

misrepresentation to characterize fees as 

mandatory when they are optional, or to 

characterize fees as optional when they 

are mandatory or consumers are 

automatically opted-in to pay them.349

Representations that fees are for 

identified goods or services when those 

goods or services are not provided 

would also be a misrepresentation. 

Further, although the rule does not 

govern how businesses set their prices, 

if a business represents that it is 

charging a fee for a specific good or 

service, but the amount of the fee does 

not reflect the cost of that good or 

service, that may be evidence that the 

business has misrepresented the nature 

or purpose of the fee. 

Misrepresentations can result from 

failing to disclose material conditions or 

limitations relating to fees and charges, 

for example, material conditions or 

limitations that would affect consumers’ 

ability to purchase covered goods or 

services at advertised prices.350

Describing a good or service as fully 

refundable without disclosing material 

limitations on refundability (e.g., 

refunds are only accepted for a specified 

amount of time) would also be 

misleading. 

The American Hotel & Lodging 

Association expressed the concern that 

businesses may use inconsistent 

descriptions of similar fees and confuse 

consumers in disclosing the nature and 

purpose of fees or the identity of the 

goods or services for which fees are 

imposed.351 Using vague language or fee 

descriptions (e.g., unspecified service or 

convenience fees) that do not accurately 

inform consumers of the nature or 

purpose of fees or charges or the 

identity of the good or service for which 

the fee or charge is imposed 

misrepresents those fees. In addition, it 

would be misleading if a business 

conflates fees so that consumers are 

unable to determine their nature, 

purpose, or the identity of the goods or 

services for which the fees are charged. 

Whether fee descriptions are adequate 

to avoid misrepresenting their nature, 

purpose, or the identity of goods or 

services for which they are charged will 

be case specific and may depend on the 

context. 

Another commenter argued that the 

rule would unfairly hold online travel 

agencies and other intermediaries liable 

for fee misrepresentations when only 

travel service providers can know 

whether representations about the 

nature and purpose of fees are 

accurate.352 As discussed in section 

III.B.1.f, complying with the rule would 

require businesses that sell or advertise 

covered goods or services through 

platforms to provide the platforms with 

accurate pricing information. 

Contractual relationships and the rule’s 

application to B2B transactions should 

ensure that businesses that rely on other 

parties for pricing information receive 

accurate pricing information. 

One commenter argued that charging 

consumers for ‘‘speculative tickets’’ in 

the live-event sector is deceptive 

because it is tantamount to ‘‘charging 

consumers for something that doesn’t 

exist,’’ and suggested the rule should 

‘‘prohibit sellers or resellers from 

charging the consumer for buying 

something the seller doesn’t own, or 

that does not even exist.’’ 353 The 


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Beethoven, and a lecturer at the University of 

Georgia Terry College of Business). 354See, e.g., FTC–2023–0064–2918 (Elite Catering 

+ Event Professionals opposed the 

misrepresentations provision for private food 

services contracts because ‘‘[t]hroughout the 

contracting process, there are ample opportunities 

for the customer to seek clarification or negotiate 

the applicability of the price and fees.’’). 355FTC–2023–0064–3016 (National Federation of 

Independent Business proposed modifying the rule 

as follows: ‘‘(a) . . . [I]t is an unfair and deceptive 

practice . . . for a Business to: (i) misrepresent the 

total cost of a good or service by omitting a 

mandatory fee from the advertised price of the good 

or service; or (ii) misrepresent the nature and 

purpose of such a mandatory fee.’’ The commenter 

also proposed exempting any business from that 

requirement if it discloses the fee clearly and 

conspicuously ‘‘before a consumer becomes 

obligated to pay the fee’’ and ‘‘either makes no 

statement about the nature and purpose of the fee 

or makes an accurate statement of the nature and 

purpose of the fee.’’). 

356 16 CFR part 437. 

357 12 CFR part 1014. 

358 12 CFR part 1015. 

359Promulgation of Trade Regulation Rule and 

Statement of Basis and Purpose: Rule Concerning 

Recurring Subscriptions and Other Negative Option 

Programs, 89 FR 90476 (Nov. 15, 2024), https://

www.federalregister.gov/documents/2024/11/15/ 

2024-25534/negative-option-rule. 

360 16 CFR part 310. 

361 In addition, the added definition of ‘‘Covered 

Goods or Services’’ removes any potential overlap 

between the final rule and Regulations N and O. 

362See, e.g., FTC–2023–0064–3150 (Attorney 

General of the State of California ‘‘appreciate[d] that 

the FTC’s rule respects the states’ role in protecting 

consumers from deceptive price advertising, and 

the rule’s clear intent to create a federal floor, rather 

than a ceiling, for consumer protection.’’); FTC– 

2023–0064–3212 (TickPick, LLC). 

363See, e.g., Cong. Rsch. Serv., R45825, Federal 

Preemption: A Legal Primer 23 (2023), https://

crsreports.congress.gov/product/pdf/R/R45825/3. 

364 Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta, 

458 U.S. 141, 153 (1982). 

365Many FTC regulations, including regulations 

promulgated under section 18 of the FTC Act, 

include provisions addressing State laws and 

preemption. See, e.g., Funeral Rule, 16 CFR 453.9 

(exempting from preemption State laws that 

‘‘afford[ ] an overall level of protection [that] is as 

great as, or greater than, the protection afforded by’’ 

the FTC’s Rule); Rule Concerning Cooling Off 

Period for Sales Made at Homes or at Certain Other 

Locations, 16 CFR 429.2(b) (exempting laws and 

ordinances that provide ‘‘a right to cancel a doorto-door sale that is substantially the same or greater 

than that provided in this part’’); Business 

Opportunity Rule, 16 CFR 437.9(b) (‘‘The FTC does 

not intend to preempt the business opportunity 

sales practices laws of any state or local 

government, except to the extent of any conflict 

with this part. A law is not in conflict with this 

Rule if it affords prospective purchasers equal or 

greater protection . . . .’’); Mail, Internet, or 

Telephone Order Merchandise Rule, 16 CFR 

435.3(b) (‘‘This part does supersede those 

provisions of any State law, municipal ordinance, 

or other local regulation which are inconsistent 

with this part to the extent that those provisions do 

not provide a buyer with rights which are equal to 

or greater than those rights granted a buyer by this 

part.’’); Franchise Rule, 16 CFR 436.10(b) (‘‘The 

FTC does not intend to preempt the franchise 

practices laws of any state or local government, 

except to the extent of any inconsistency with part 

436. A law is not inconsistent with part 436 if it 

affords prospective franchisees equal or greater 

protection . . . .’’); Labeling and Advertising of 

Home Insulation, 16 CFR 460.24(b) (preemption of 

‘‘State and local laws and regulations that are 

inconsistent with, or frustrate the purposes of, this 

regulation’’). 

366See, e.g., FTC–2023–0064–3150 (Attorney 

General of the State of California commented that 

consumer protection is also a state concern, so, ‘‘it 

is appropriate, then, that the rule does not preempt 

a state law unless the rule and the state law conflict 

and then only to the extent of the inconsistency.’’); 

FTC–2023–0064–3215 (Attorneys General of the 

States of North Carolina and Pennsylvania, along 

with Attorneys General of the States or Territories 

of Arizona, Colorado, Connecticut, Delaware, 

District of Columbia, Hawaii, Illinois, Maine, 

Michigan, Minnesota, New Jersey, New York, 

Oklahoma, Oregon, Vermont, Washington, and 

Wisconsin, supported the rule’s preemption 

provision because it ‘‘recognizes and preserves the 

interest that individual states have in combatting 

unfair or deceptive acts or practices committed in 

our respective jurisdictions.’’); FTC–2023–0064– 

3275 (Berkeley Center for Consumer Law and 

Continued 

Commission notes that the final rule 

does not directly address the sale of 

speculative tickets. However, a business 

that represents that tickets are in fact 

available when they are not may violate 

§§ 464.2(c) and 464.3 by failing to 

disclose clearly and conspicuously, and 

by misrepresenting, the identity of the 

good or service for which fees or charges 

are imposed. 

Commenters opposed the 

misrepresentation provision in the 

context of negotiated contracts because 

negotiations arguably allow consumers 

to seek clarification about fees.354 The 

Commission, however, has not 

identified any justification for excluding 

contracts from the misleading fees 

provision. Truthful fee disclosures in 

contract negotiations are material to 

consumers. One commenter 

recommended providing a safe harbor 

from the misleading fees provision if 

businesses clearly and conspicuously 

disclose fees and make either no 

statement or an accurate statement 

about the nature and purpose of fees.355

The Commission declines to grant a safe 

harbor from the misleading fees 

provision when businesses make 

affirmative disclosures. Whether 

disclosures are adequate, clear and 

conspicuous, and not misleading are 

issues that may depend on the specific 

facts and circumstances of the 

transaction. 

The NPRM identified and sought 

comment on the proposed rule’s 

intersection with existing Federal rules 

and regulations containing prohibitions 

on misrepresentations: the Business 

Opportunity Rule,356 the Mortgage Acts 

and Practices Advertising Rule 

(Regulation N),357 the Mortgage 

Assistance Relief Services Rule 

(Regulation O),358 the amendments to 

the Negative Option Rule,359 and the 

Telemarketing Sales Rule.360 The 

Commission did not receive substantive 

comments about overlap or conflict with 

these rules.361 The Commission is not 

aware of any evidence that there is a 

conflict between these rules and the 

final rule. The Commission believes it is 

possible for businesses to comply with 

each of them, as applicable. 

D. § 464.4 Relation to State laws 

Proposed § 464.4 addressed 

preemption and the proposed rule’s 

relation to State statutes, regulations, 

orders, or interpretations, including 

State common law (hereinafter ‘‘State 

law’’). Proposed § 464.4(a) provided that 

the rule would not supersede or 

otherwise affect any State law unless the 

State law is inconsistent with the rule, 

and then only to the extent of the 

inconsistency. Proposed § 464.4(b) 

specified that a State law providing 

consumers with greater protections than 

the rule does not, solely for that reason, 

make the State law inconsistent with the 

rule. When a State law offers greater (or, 

in some circumstances, even lesser) 

protection than the rule, if businesses 

can comply with both, they are not 

inconsistent. Thus, as commenters 

noted, the rule would establish a 

regulatory floor rather than a ceiling.362

After reviewing the comments, the 

Commission adopts the provision as 

proposed in the NPRM. 

The Commission finds it has the 

authority to promulgate regulations that 

preempt inconsistent State laws under 

section 5 of the FTC Act. Even without 

an express preemption provision, 

Federal statutes and regulations 

preempt conflicting State laws. Under 

the Supreme Court’s conflict 

preemption doctrine, a Federal statute 

or regulation impliedly preempts State 

law when it is impossible for the 

regulated parties to comply with both 

the Federal and the State law, or when 

a State law is an obstacle to achieving 

the full purposes and objectives of the 

Federal law.363 ‘‘Federal regulations 

have no less pre-emptive effect than 

[F]ederal statutes.’’ 364 Accordingly, the 

rule preempts a State law only to the 

extent it is inconsistent with the rule 

and compliance with both is impossible, 

or it is an obstacle to achieving the full 

purposes and objectives of the rule. To 

provide a clear explanation of the 

Commission’s intent and the rule’s 

scope of preemption, the rule includes 

an express preemption provision at 

§ 464.4.365

Numerous commenters supported 

proposed § 464.4(b)’s targeted approach 

of preempting only inconsistent parts of 

State laws.366 Some commenters, 


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Economic Justice et al. commented that the rule is 

‘‘an invaluable complement to state and private 

actions to challenge hidden and deceptive pricing 

practices.’’); FTC–2023–0064–3293 (Travel 

Technology Association); FTC–2023–0064–3262 

(Skyscanner); FTC–2023–0064–3266 (StubHub, 

Inc.); FTC–2023–0064–3212 (TickPick, LLC); FTC– 

2023–0064–3267 (National Retail Federation). 

367See, e.g., FTC–2023–0064–2886 (American 

Gaming Association); FTC–2023–0064–3094 

(American Hotel & Lodging Association); FTC– 

2023–0064–3122 (Vivid Seats); FTC–2023–0064– 

3204 (Expedia Group); FTC–2023–0064–3137 

(Chamber of Progress); FTC–2023–0064–3127 (U.S. 

Chamber of Commerce); FTC–2023–0064–3233 

(NCTA—The Internet & Television Association); 

FTC–2023–0064–3238 (Gibson, Dunn & Crutcher 

LLP); FTC–2023–0064–2856 (National Football 

League). 

368See, e.g., FTC–2023–0064–3127 (U.S. Chamber 

of Commerce); FTC–2023–0064–3238 (Gibson, 

Dunn & Crutcher LLP). 

369FTC–2023–0064–3137 (Chamber of Progress). 

370See, e.g., FTC–2023–0064–3244 (Vacation 

Rental Management Association); FTC–2023–0064– 

3206 (Motor Vehicle Protection Products 

Association et al.); FTC–2023–0064–3143 (ACA 

Connects—America’s Communications 

Association). 

371See, e.g., FTC–2023–0064–3152 (Building 

Owners & Managers Association et al.); FTC–2023– 

0064–3133 (National Multifamily Housing Council 

and the National Apartment Association); FTC– 

2023–0064–3115 (National Association of 

Residential Property Managers); FTC–2023–0064– 

3116 (Manufactured Housing Institute); FTC–2023– 

0064–3172 (New Jersey Apartment Association); 

FTC–2023–0064–3289 (Zillow Group). 

372The Commission has made similar findings in 

previous regulations. See, e.g., Final rule: NonCompete Clause Rule, 89 FR 38342, 38453–54 (May 

7, 2024) (finding that the Non-Complete Clause 

Rule sets a Federal floor that will reduce the 

variations in a patchwork of State regulations); 

Promulgation of Trade Regulation Rule and 

Statement of Its Basis and Purpose: Cooling-Off 

Period for Door-to-Door Sales, 37 FR 22934, 22958 

(Oct. 26, 1972) (finding that, when State laws ‘‘give 

the consumer greater benefit and protection . . ., 

there seems to be no reason to deprive the affected 

consumers of these additional benefits,’’ but when 

State laws do not, ‘‘the rule would supply the 

needed protection or be construed to supersede the 

weak statute to the extent necessary to give the 

consumer the desired protection.’’). 

373See, e.g., Final Trade Regulation Rule: Trade 

Regulation Rule; Funeral Industry Practices, 47 FR 

42260, 42287 (Sept. 24, 1982) (codified at 16 CFR 

part 453) (noting the purpose of the rule’s provision 

addressing relation of the rule to State law is ‘‘to 

encourage federal-state cooperation by permitting 

appropriate state agencies to enforce their own state 

laws that are equal to or more stringent than the 

trade regulation rule’’). 

however, stated that the rule should 

completely preempt all State laws to 

provide greater consistency and clarity 

and to lower compliance costs,367

particularly when State laws provide 

greater protections.368 However, if a 

business subject to both the rule and a 

State law that imposes greater 

protections does not want to use 

different practices for that State versus 

the rest of the country, it can choose to 

comply with both by using a single set 

of practices consistent with the greater 

protections afforded under the 

applicable State law. Nothing in the rule 

prohibits businesses from giving 

consumers greater protections than the 

rule requires. Another commenter 

expressed concern that some State laws 

create loopholes that allow businesses 

to mischaracterize fees as government 

charges that they then can exclude from 

total price.369 The Commission 

discusses issues related to the rule’s 

treatment of government charges in 

section III.A.5 and notes here that final 

§ 464.3 would prohibit misrepresenting 

that a fee is a Government Charge, or 

otherwise misrepresenting the nature, 

purpose, amount, or refundability of any 

fee or charge. 

Other commenters suggested that the 

Commission provide compliance 

guidance that addresses when State law 

differs from the rule and identify which 

State laws are not preempted.370 Some 

commenters suggested that existing 

State and local industry regulations can 

make the rule unnecessary, duplicative, 

and confusing due to conflicting 

requirements.371 The Commission 

reiterates that a State law is preempted 

only to the extent it conflicts with the 

rule’s requirements and complying with 

both is impossible, or it is an obstacle 

to achieving the full purposes and 

objectives of the rule. A State law can 

provide greater protections and, solely 

for that reason, will not be inconsistent 

with the rule; a business can comply 

with both. A business also can comply 

with both when the State law provides 

lesser protections, although businesses 

still would have to comply with the 

greater protections of the rule. Only if a 

State law provides conflicting 

requirements, and a business cannot 

comply with both, or it is an obstacle to 

achieving the full purposes and 

objectives of the rule, will the State law 

be preempted, and then only to the 

extent of that conflict or obstacle. 

Moreover, preemption furthers a 

primary goal of the final rule, discussed 

in section V.A: to provide a uniform, 

minimum standard for pricing 

disclosures for covered goods or 

services that is easy for businesses and 

consumers to understand. The 

Commission also determines, as 

discussed in section V.B, that declining 

to issue this final rule and continuing to 

rely solely on State laws and piecemeal 

adjudication would be less effective. 

The Commission believes the final 

rule’s establishment of nationwide 

minimum standard will functionally 

reduce many variations among State 

laws,372 because businesses will have to 

conform their practices to meet the 

rule’s standards for covered goods or 

services to the extent those standards 

exceed or directly conflict with State 

law requirements. Moreover, to the 

extent State law is not inconsistent with 

the final rule, additional State authority 

and resources will only serve to further 

protect consumers and competition. To 

that end, the Commission will continue 

to work with its State law enforcement 

partners in battling unfair and deceptive 

pricing disclosure practices.373 For the 

reasons stated herein, the Commission 

adopts § 464.4 as proposed. 

E. § 464.5 Severability 

The Commission includes a 

severability clause at final § 464.5, 

which provides that, if any provision of 

the final rule is held to be invalid or 

unenforceable either by its terms, or as 

applied to any person, industry, or 

circumstance, or stayed pending further 

agency action, the provision shall be 

construed to continue to give the 

maximum effect to the provision 

permitted by law. It further provides 

that any such invalidity shall not affect 

the application of the provision to other 

persons, industries, or circumstances, or 

the validity or application of other 

provisions. Final § 464.5 also states that, 

if any provision or application of the 

final rule is held to be invalid or 

unenforceable, the provision or 

application shall be severable from the 

final rule and shall not affect the 

remainder thereof. This provision 

confirms the Commission’s intent, as 

discussed herein, that the final rule be 

given the maximum effect permitted by 

law even if a reviewing court stays or 

invalidates any provision, any 

component of any provision, or any 

application of the rule, in whole or in 

part, to any person, industry, or 

circumstance. 

In issuing this final rule, as discussed 

in section II.A and II.B, the Commission 

finds bait-and-switch pricing tactics and 

misleading fee practices to be unfair and 

deceptive because they deceive 

consumers about the true cost of goods 

and services, prevent price comparison, 

and harm competitors that do accurately 

disclose true cost. The Commission also 

finds such practices to be widespread 

and to affect many types of consumer 

purchasing transactions, particularly 

with respect to covered goods or 

services. The Commission adopts this 

rule to comprehensively address the 

practices and to provide a consistent, 

administrable standard with respect to 

covered goods or services. The 

Commission finds in section V.E that, 

for covered goods or services, the 

benefits of the rule exceed its costs. 

At the same time, the Commission 

finds that each of the provisions, 


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374See, e.g., In re Filderman Corp., 64 F.T.C. 427, 

442–43, 461 (1964), https://www.ftc.gov/sites/ 

default/files/documents/commission_decision_

volumes/volume-64/ftcd-vol64januarymarch1964pages409-511.pdf; In re Resort Car 

Rental Sys., Inc., 83 F.T.C. 234, 281–82, 300 (1973), 

https://www.ftc.gov/system/files/ftc_gov/pdf/Resort

%20Car%20Rental%20System%2C%20Inc.

%2083%20FTC%20234%20%281973%29.pdf, 

aff’d sub. nom. Resort Car Rental Sys., Inc. v. FTC, 

518 F.2d 962, 964 (9th Cir. 1975); Opinion of the 

Commission at 28–30, 47–50, In re Intuit Inc., No. 

9408 (FTC Jan. 22, 2024), https://www.ftc.gov/ 

system/files/ftc_gov/pdf/d09408_commission_

opinion_redacted_public.pdf; In re George’s Radio 

& Television Co., 60 F.T.C. 179, 193–94 (1962), 

https://www.ftc.gov/sites/default/files/documents/ 

commission_decision_volumes/volume-60/ftcdvol60january-june1962pages107-211.pdf (collecting 

cases involving false savings claims); cases cited 

supra notes 61–62 (collecting FTC enforcement 

actions alleging, respectively, that bait-and-switch 

pricing tactics concerning hidden fees and 

misrepresentations regarding the nature and 

purpose of fees violated section 5); NPRM, 88 FR 

77435–37 (section III.C (‘‘Law Enforcement Actions 

and Other Responses’’)). See also supra note 115 

(collecting cases holding that later disclosures 

cannot cure deceptive door openers). 

375See, e.g., FTC–2023–0064–2883 (District of 

Columbia, Office of the People’s Counsel); FTC– 

2023–0064–3104 (Truth in Advertising, Inc.); see 

also FTC–2022–0069–6077 (ANPR) (Institute for 

Policy Integrity, New York University School of 

Law). 

376FTC–2023–0064–3127 (U.S. Chamber of 

Commerce); FTC–2023–0064–3133 (National 

Multifamily Housing Council and National 

Apartment Association); FTC–2023–0064–3152 

(Building Owners & Managers Association et al.); 

FTC–2023–0064–3202 (TechNet); FTC–2023–0064– 

3238 (Gibson, Dunn & Crutcher LLP); FTC–2023– 

0064–3251 (National RV Dealers Association); FTC– 

2023–0064–3263 (Flex Association); FTC–2023– 

0064–3294 (International Franchise Association). 

377FTC–2023–0064–3233 (NCTA—The internet & 

Television Association); FTC–2023–0064–3238 

(Gibson, Dunn & Crutcher LLP); FTC–2023–0064– 

3294 (International Franchise Association). 

378FTC–2023–0064–3016 (National Federation of 

Independent Business, Inc.); FTC–2023–0064–3028 

(Competitive Enterprise Institute); FTC–2023–0064– 

3233 (NCTA—The internet & Television 

Association); FTC–2023–0064–3238 (Gibson, Dunn 

& Crutcher LLP); FTC–2023–0064–3267 (National 

Retail Federation). 

components of the provisions, and 

applications of the final rule operate 

independently, and that the evidence 

and findings supporting each stand 

independent of one another. The 

Commission finds that realizing the 

benefits of the rule does not require the 

joint adoption or operation of each 

provision. In addition, while the 

Commission believes applying the same 

restrictions to all pricing representations 

would provide even greater overall 

benefits, as explained in Parts II.B and 

V.B, the Commission finds the benefits 

of the final rule exceed the costs as to 

covered goods or services, both overall 

and with respect to each substantive 

provision of the rule. For covered goods 

or services, as discussed in section V.E, 

ample data show the rule would have 

positive quantified net benefits, 

including by reducing search costs, as 

well as unquantified reductions in 

deadweight loss and consumer 

frustration. Similarly, consumers would 

benefit from the misleading fees 

prohibition even if the requirement to 

disclose total price were stayed or 

invalidated. The benefits would also 

justify the costs if the total price 

provision were further limited to either 

just the live-event ticketing or just the 

short-term lodging industry. 

Based on the available data, the 

Commission concludes that, even if the 

rule were more limited in scope or if it 

applied to a more limited set of 

transactions, such as to a single industry 

or to particular circumstances, it would 

still achieve some of the Commission’s 

objectives and the benefits of the rule 

would still exceed the costs. Although 

a more limited scope or application 

would change the magnitude of the 

overall benefit of the final rule, it would 

not undermine the valid and measurable 

benefit of, and justification for, the 

remaining provisions or applications of 

the final rule. Thus, were a court to stay 

or invalidate any provision, any 

component of any provision, or any 

application of the rule, the Commission 

intends the remainder of the rule to 

remain in force. 

As described in section V.B, the 

Commission considered alternatives to 

the final rule that would have applied 

the rule to other transactions or 

industries or expanded it to all goods 

and services within the Commission’s 

jurisdiction. The Commission finds that 

each such alternative would be an 

appropriate exercise of the 

Commission’s authority under sections 

5 and 18 of the FTC Act as stand-alone 

regulations because disclosure of total 

price in any type of transaction or 

industry—whether or not the same is 

required in other transactions or 

industries—mitigates the harms caused 

by the unfair or deceptive pricing tactics 

in those transactions or industries to 

which the rule does apply. At the same 

time, as discussed in parts I and II.A, 

the Commission finds bait-and-switch 

pricing tactics and misleading fee 

practices are widespread and potentially 

growing. As a result, the Commission 

may later find that a rule of expanded 

or even general applicability, to the 

extent of its jurisdiction, would be 

appropriate and would result in benefits 

to consumers and competition that are 

greater in magnitude than a rule with 

more limited applicability. However, 

such findings do not invalidate this 

final rule’s quantifiable positive 

benefits, in whole or in part. 

Accordingly, the Commission 

considers and intends each of the 

provisions adopted in the final rule to 

be severable, within each provision, 

from other provisions in Part 464, and 

as applied to different persons, 

industries, or circumstances. In the 

event of a stay or invalidation of any 

provision, any component of any 

provision, or of any provision as it 

applies to certain persons, conduct, or 

industry, the Commission’s intent is to 

otherwise preserve and enforce the final 

rule to the fullest possible extent. 

Therefore, if a reviewing court were to 

stay or invalidate a particular 

application of the final rule, or a 

provision thereof, as to certain persons, 

industries, or circumstances, other 

businesses that remain covered by the 

rule should be required to comply with 

the applicable provisions of the final 

rule that remain in effect. 

IV. Challenges to the FTC’s Legal 

Authority To Promulgate the Rule 

As explained in the NPRM and 

section II, this rule is consistent with 

decades of FTC adjudications and 

enforcement actions addressing the 

standards governing unfair or deceptive 

pricing practices.374 The Commission 

issues this rule to prevent prevalent 

unfair or deceptive acts or practices and 

to promote compliance in a manner that 

accounts for and balances the needs of 

consumers and regulated entities. The 

rule falls squarely within the 

Commission’s legal authority, is based 

on substantial evidence in the 

rulemaking record, and clearly defines 

specific unfair and deceptive practices 

regarding fees or charges. 

The Commission received comments 

supporting, discussing, or questioning 

its authority to promulgate the final 

rule. Commenters supporting the 

Commission’s authority noted the rule 

falls squarely within the Commission’s 

mandate to prevent unfair and deceptive 

acts and practices through rulemaking 

under sections 5 and 18 of the FTC 

Act.375 Commenters questioning the 

Commission’s rulemaking authority 

typically advanced one of three 

arguments. First, some commenters 

argued that requiring disclosures related 

to pricing is a major question that 

Congress has not given the Commission 

authority to address.376 Second, some 

commenters argued that if the rule was 

in fact consistent with the Commission’s 

authority under sections 5 and 18 of the 

FTC Act, Congress had impermissibly 

delegated this authority to the 

Commission.377 Third, some 

commenters argued that the disclosures 

required by the rule violate the First 

Amendment.378 In addition to these 

arguments, one commenter asserted that 

the rule is invalid because the 


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379FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

380See, e.g., id.; FTC–2023–0064–3133 (National 

Multifamily Housing Council and National 

Apartment Association); FTC–2023–0064–3152 

(Building Owners & Managers Association et al.); 

FTC–2023–0064–3263 (Flex Association); FTC– 

2023–0064–3294 (International Franchise 

Association). 

381The International Franchise Association, 

which represents franchised businesses offering 

short-term lodging, raised challenges to the 

Commission’s authority to promulgate the rule. 

IFA’s comment, however, primarily focused on the 

NPRM’s industry-neutral scope and its implications 

for franchised businesses that do not offer Covered 

Goods or Services. Regarding the short-term lodging 

industry specifically, IFA’s comment challenged 

certain aspects of the Commission’s estimate of 

compliance costs, which are addressed in section V. 

See FTC–2023–0064–3294 (International Franchise 

Association). 

382See, e.g., FTC–2023–0064–3263 (Flex 

Association); FTC–2023–0064–3127 (U.S. Chamber 

of Commerce); FTC–2023–0064–3152 (Building 

Owners & Managers Association et al.); FTC–2023– 

0064–3202 (TechNet); FTC–2023–0064–3133 

(National Multifamily Housing Council and 

National Apartment Association); FTC–2023–0064– 

3238 (Gibson, Dunn & Crutcher LLP). While 

commenters suggested that the rule would have 

‘‘political and economic significance,’’ no 

commenters pointed to any specific political 

significance. 

383FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP); FTC–2023–0064–3127 (U.S. 

Chamber of Commerce). 

384FTC–2023–0064–3127 (U.S. Chamber of 

Commerce); FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP); FTC–2023–0064–3152 (Building 

Owners & Managers Association et al.); FTC–2023– 

0064–3202 (TechNet); FTC–2023–0064–3133 

(National Multifamily Housing Council and 

National Apartment Association). 

385West Virginia v. EPA, 597 U.S. at 721 (quoting 

FDA v. Brown & Williamson Tobacco Corp., 529 

U.S. 120, 159–60 (2000)). 

386 Id. at 723–24 (quoting Util. Air Regulatory 

Group v. EPA, 573 U.S. 302, 324 (2014). 

387See generally supra section II.B; NPRM, 88 FR 

77432, 77434. 

388Cf. NLRB v. Bell Aerospace Co., 416 U.S. 267, 

294 (1974) (holding that ‘‘the Board is not 

precluded from announcing new principles in an 

adjudicative proceeding,’’ that ‘‘the choice between 

rulemaking and adjudication lies in the first 

instance within the Board’s discretion,’’ and that 

the agency’s choice between adjudication and 

rulemaking was ‘‘entitled to great weight’’); SEC v. 

Chenery Corp., 332 U.S. 194, 203 (1947) (‘‘[T]he 

choice made between proceeding by general rule or 

by individual, ad hoc litigation is one that lies 

primarily in the informed discretion of the 

administrative agency.’’). 

389Congress added section 18, 15 U.S.C. 57a, to 

the FTC Act in 1975, and that section provides the 

process the Commission must follow to promulgate 

rules defining unfair or deceptive acts or practices. 

See Magnuson-Moss Warranty—Federal Trade 

Commission Improvement Act, Public Law 93–637, 

sec. 202, § 18, 88 Stat. 2183, 2193 (1975) 

(hereinafter ‘‘Magnuson-Moss Warranty Act’’); see 

also Am. Fin. Servs. Ass’n v. FTC, 767 F.2d 957, 

967 (D.C. Cir. 1985) (summarizing the historical 

backdrop to the Commission’s authority to prevent 

unfair or deceptive acts or practices including the 

adoption of the Magnuson-Moss Warranty Act, 

which codified section 18 of the FTC Act and 

confirmed the Commission’s authority to 

promulgate rules defining acts or practices that are 

unfair or deceptive). 

390See, e.g., Franchise Rule, 16 CFR 436.2(a), 

436.5(e) and (f) (defining as an unfair or deceptive 

act or practice to fail to provide prospective 

franchisees with the franchisor’s disclosure 

document, which includes, among other things, 

disclosure of ‘‘initial fees’’—i.e., ‘‘all fees and 

payments, or commitments to pay . . . whether 

payable in lump sum or installments’’ and of ‘‘all 

other fees that the franchisee must pay to the 

franchisor or its affiliates’’); Business Opportunity 

Rule, 16 CFR 437.4(d) (defining as an unfair or 

deceptive act or practice to ‘‘[f]ail to notify any 

prospective purchaser in writing of any material 

changes affecting the relevance or reliability of the 

information contained in an earnings claim 

statement before the prospective purchaser . . . 

makes a payment’’); Business Opportunity Rule, 16 

CFR 437.6(h) (defining as an unfair or deceptive act 

Commission is unconstitutionally 

structured.379 Finally, some commenters 

asserted the Commission has not 

complied with the Administrative 

Procedure Act (‘‘APA’’).380

Most of the commenters challenging 

the Commission’s authority represent 

businesses that offer goods or services 

other than covered goods or services. 

Thus, the concerns raised by these 

commenters may not be relevant to the 

narrowed scope of the final rule. 

Further, the NPRM’s industry-neutral 

approach was central to nearly all of the 

critiques of the rule that raised 

questions regarding the Commission’s 

authority to promulgate the rule; while 

the Commission disagrees with such 

critiques, they are not applicable to this 

final rule, which focuses on two 

industries, live-event tickets and shortterm lodging. Notably, the vast majority 

of comments from businesses offering 

live-event tickets and short-term lodging 

and their direct representatives did not 

raise challenges to the Commission’s 

authority to promulgate the rule.381

Nevertheless, the Commission has 

considered the comments challenging 

its authority and explains in this section 

why it disagrees with those. 

A. Major Questions Doctrine 

Some commenters invoked the major 

questions doctrine to argue that the 

Commission lacks authority to adopt the 

rule. Commenters argued the rule raises 

a major question because addressing 

consumer fees and pricing across 

industries is of vast political and 

economic significance.382 Some 

commenters also argued that the rule is 

broader than the agency’s prior rules, 

based on the assertion that the rule 

regulates pricing.383 Commenters 

concluded that Congress has not 

authorized the Commission to 

promulgate the rule.384

The major questions doctrine, as the 

Supreme Court recently explained in 

West Virginia v. EPA, 597 U.S. 697 

(2022), applies to ‘‘ ‘extraordinary cases’ 

. . . in which the ‘history and the 

breadth of the authority that [the 

agency] has asserted,’ and the ‘economic 

and political significance’ of that 

assertion, provide a ‘reason to hesitate 

before concluding that Congress’ meant 

to confer such authority.’’ 385 When an 

agency claims a ‘‘ ‘transformative 

expansion in [its] regulatory 

authority,’ ’’ it ‘‘must point to ‘clear 

congressional authorization’ for the 

power it claims.’’ 386

Having considered the factors that the 

Supreme Court has used to identify 

major questions, the Commission, as 

discussed herein, concludes that the 

final rule does not implicate the major 

questions doctrine. The FTC does not 

claim a transformative change in its 

rulemaking authority. The final rule 

comports with the history and breadth 

of prior rules that the FTC has 

promulgated pursuant to its existing 

rulemaking authority, which Congress 

conferred to allow the Commission to 

address prevalent unfair or deceptive 

practices. Even if the major questions 

doctrine did apply, the Commission 

concludes that Congress provided clear 

authorization for the Commission to 

promulgate this rule. 

1. The Rule Does Not Address a Major 

Question 

(a) The Commission Has a Long History 

of Addressing Unfair or Deceptive Acts 

or Practices Related to Pricing 

Information 

Identifying unfair or deceptive acts or 

practices related to the disclosure of the 

price and purpose of goods and services 

is at the core of the Commission’s 

mandate under section 5.387 The 

Commission has the authority to 

address these unfair or deceptive acts or 

practices both through case-by-case 

enforcement, either administratively or 

in Federal court, or through rulemaking 

if the unfair or deceptive practices are 

prevalent as established by the 

rulemaking record. The Commission 

may choose case-by-case adjudication or 

rulemaking at its discretion.388

The Commission’s authority to 

promulgate rules to define with 

specificity unfair or deceptive acts or 

practices under section 18 of the FTC 

Act, 15 U.S.C. 57a, is not extraordinary 

and is undisputed, resting on firm 

historical footing.389 Indeed, when 

consumers have faced bait-and-switch 

tactics in the past, including being 

unable to get accurate material 

information about what they must pay 

and what they will receive in return, the 

Commission has repeatedly issued rules 

that define unfair or deceptive acts or 

practices related to the disclosure of that 

material information.390 For example, 


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or practice to ‘‘[m]ispresent the cost . . . of the 

business opportunity or the goods or services 

offered to a prospective purchaser’’); Funeral Rule, 

16 CFR 453.2(a) and (b) (defining as an unfair or 

deceptive act or practice to ‘‘fail to furnish accurate 

price information disclosing the cost to the 

purchaser for each of the specific funeral goods and 

funeral services used in connection with the 

disposition of deceased human bodies’’ and 

requiring funeral providers to provide specific price 

lists in writing). 

391Statement of Basis and Purpose: Retail Food 

Store Advertising and Marketing Practices, 36 FR 

8777, 8777–78 (May 13, 1971) (citing a Bureau of 

Economics staff report titled ‘‘Economic Report on 

Food Chain Selling Practices in the District of 

Columbia and San Francisco’’). Similarly, when the 

Commission later amended the Unavailability Rule, 

it again stressed that food retailers must not engage 

in bait and switch advertising—where the seller 

advertises an unavailable good at a low price to get 

the consumer in the door—or deception regarding 

availability of advertised goods. Final amendments 

to trade regulation rule: Amendment to Trade 

Regulation Rule Concerning Retail Food Store 

Advertising and Marketing Practices, 54 FR 35456, 

35462–63 (Aug. 28, 1989). 

392E.g., In re Filderman Corp., 64 F.T.C. 427, 

442–43, 461 (1964); Resort Car Rental Sys., 83 

F.T.C. at 281–82, 300 (1973); Complaint ¶¶ 12, 46– 

49, In re LCA-Vision, No. C–4789 (FTC Mar. 13, 

2023); Opinion of the Commission at 37–40, 47–50, 

In re Intuit Inc., No. 9408 (FTC Jan. 22, 2024). See 

generally supra section I.A.–I.C (discussing the 

comment and hearing record in response to the 

ANPR and NPRM); section II.A (discussing the 

prevalence of the practices that the rule addresses). 

393See, e.g., FTC–2023–0064–3263 (Flex 

Association); FTC–2023–0064–3127 (U.S. Chamber 

of Commerce); FTC–2023–0064–3152 (Building 

Owners & Managers Association et al.); FTC–2023– 

0064–3202 (TechNet); FTC–2023–0064–3133 

(National Multifamily Housing Council and 

National Apartment Association). 

394 15 U.S.C. 45. 

395Commenters did not argue or provide 

substantive support for any argument that a major 

question was raised by proposed § 464.3(a), which 

would have prohibited any Business from 

misrepresenting the nature and purpose of any 

amount a consumer may pay, including its 

refundability and the identity of any good or service 

for which it is charged. The Commission is 

finalizing § 464.3 more narrowly to prohibit any 

Business, in any offer, display, or advertisement for 

a Covered Good or Service, from misrepresenting 

any fee or charge, including its nature, purpose, 

amount, or refundability, and the identity of the 

good or service for which it is imposed. 

396See supra section I (‘‘The discretion to set 

prices remains squarely with businesses; the rule 

simply requires that they tell consumers the truth 

about those prices.’’). 

397See supra section III.A.8.c (‘‘The rule neither 

requires, nor prohibits, the itemization of 

mandatory fees that must be included in Total 

Price.’’); section III.B.1.d–e (responding to 

comments about dynamic pricing, rebates, bundled 

pricing, and other discounts). 

398West Virginia v. EPA, 597 U.S. at 716, 723 

(quoting Util. Air, 573 U.S. at 324). 

399 15 U.S.C. 45, 57a. 

400See S. Rep. No. 75–221, at 2 (1937) (report on 

Amendments to the Federal Trade Commission Act 

(S.1077), explaining Congress’s reasoning in 

granting the Commission authority in 1914 to 

define specific unfair methods of competition, and 

then applying the same reasoning to the proposed 

grant of authority to prohibit unfair or deceptive 

acts or practices: ‘‘The committee gave careful 

consideration to the question as to whether it would 

attempt to define the many and variable unfair 

practices . . . or whether it would by a general 

declaration . . . condemn[ ] unfair practices, 

leav[ing] it to the Commission to determine what 

practices were unfair.’’ The Committee ‘‘concluded 

that the latter course would be the better, for the 

reason . . . that there were too many unfair 

practices to define, and after writing 20 of them into 

the law it would be quite possible to invent 

others.’’); see also H.R. Rep. No. 93–1606, at H 

12060 (1974) (Conf. Rep.) (report on Consumer 

Product Warranty and Federal Trade Commission 

Improvement Act, stating: ‘‘[section 18] is an 

important power by which the Commission can 

fairly and efficiently pursue its important statutory 

mission.’’ Further, ‘‘[b]ecause the prohibitions of 

section 5 of the Act are quite broad, trade regulation 

rules are needed to define with specificity conduct 

that violates the statute and to establish 

requirements to prevent unlawful conduct.’’). 

the Commission initiated the 

rulemaking resulting in the Rule on 

Retail Food Store Advertising and 

Marketing Practices (the ‘‘Unavailability 

Rule’’), 16 CFR part 424, based in part 

on findings in a Commission report that 

items priced at or below the advertised 

price were frequently unavailable and 

that in ‘‘a very substantial majority of 

the instances of the deviations, the 

prices marked on the items were higher 

than the advertised price.’’ 391

As discussed in parts I and II, there 

is nothing new about businesses using 

bait-and-switch tactics to reel in and 

deceive consumers, just as there is 

nothing new about the Commission 

exercising its authority to limit such 

tactics and the harms they cause.392

This rule is tailored to address practices 

squarely within the scope of the 

Commission’s core work to protect 

consumers: bait-and-switch pricing 

tactics, including drip pricing, and 

misrepresentations regarding a material 

term. As described in section II.A and 

II.B, the Commission adopts this rule 

now because bait-and-switch tactics, 

including drip pricing, and 

misrepresentations as to the nature and 

purpose of fees and charges are 

prevalent and continue to harm 

consumers. This is precisely what 

section 18 of the FTC Act envisions and 

is consistent with the Commission’s 

exercise of the same authority in the 

past. 

(b) Commenters’ Claims About the 

Scope of the Acts or Practices Covered 

by the Rule Are Inapplicable or 

Overstated 

Commenters suggested that the major 

questions doctrine is implicated simply 

because the rule proposed by the NPRM 

was industry-neutral.393 The 

Commission disagrees. Congress 

authorized the Commission to prevent 

unfair or deceptive practices in or 

affecting commerce across the economy 

while specifying a limited number of 

industries, activities, or entities that are 

exempt.394 These comments are 

inapposite, however, because the final 

rule is limited to covered goods or 

services: live-event ticketing and shortterm lodging. 

Commenters also contended that the 

rule implicates a major question because 

it regulates pricing practices broadly or 

supposedly will have effects on a wide 

array of pricing strategies.395 The 

Commission disagrees. The rule focuses 

on hidden mandatory fees or charges 

that obscure the total price of a covered 

good or service and misrepresentations 

about the nature, purpose, amount, and 

refundability of fees or charges. The rule 

has no effect on many pricing practices 

and strategies, including a business’s 

fundamental decision about what price 

to charge consumers for its goods or 

services.396 Nor does the rule affect a 

business’s ability to use dynamic 

pricing, to offer or use sales, discounts, 

rebates, or special offers, or to truthfully 

itemize fees and costs so long as the 

business accurately describes the total 

price upfront.397 With respect to 

mandatory fees, the rule does not 

prevent businesses from continuing to 

charge such fees as a pricing strategy, 

itemizing them in addition to stating the 

total price, or from providing nonmisleading information about those fees. 

Indeed, a number of commenters have 

misunderstood the rule to act as a 

prohibition or limitation on itemization; 

as explained in section III, truthful 

itemization is not prohibited. 

In sum, the rule does not address a 

major question because it focuses on 

traditional types of unfair or deceptive 

acts or practices that have long been the 

subject of Commission rulemaking and 

enforcement activity and targets only 

those acts or practices. 

2. Congress Provided the Commission 

With a Clear Grant of Authority To 

Promulgate This Rule 

Even if the final rule did present a 

major question, the FTC Act provides 

clear authorization for the rule. In cases 

involving major questions, courts expect 

Congress to ‘‘speak clearly’’ if it wishes 

to assign the disputed power.398 In the 

FTC Act, Congress vested the 

Commission with enforcement powers 

and the authority to promulgate rules to 

carry out the Commission’s mandate to 

prevent unfair or deceptive acts or 

practices.399 Rather than trying to define 

all unfair or deceptive acts and 

practices, Congress empowered the 

Commission to respond to changing 

market conditions and to identify 

conduct that is unfair or deceptive.400

When the Commission was created by 

the FTC Act in 1914, the Act prohibited 

‘‘unfair methods of competition’’ in 


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401Federal Trade Commission Act, Public Law 

63–203, secs. 5, 6(g), 38 Stat. 717, 719, 722 (1914). 

402 FTC v. Raladam Co., 283 U.S. 643, 647–49 

(1931) (‘‘The paramount aim of the [FTC] act is the 

protection of the public from the evils likely to 

result from the destruction of competition or the 

restriction of it in a substantial degree. . . . Unfair 

trade methods are not per se unfair methods of 

competition.’’). 

403Federal Trade Commission Act Amendments 

of 1938 (Wheeler-Lea Act), Public Law 75–447, sec. 

3, sec. 5, 52 Stat. 111, 111 (1938). 

404Magnuson-Moss Warranty—Federal Trade 

Commission Improvement Act, Public Law 93–637, 

sec. 202, sec. 18, 88 Stat. 2183, 2193 (1975) 

(codified at 15 U.S.C. 57a). 

405Promulgation of Trade Regulation Rule and 

Statement of Basis and Purpose: Preservation of 

Consumers’ Claims and Defenses (Holder Rule), 40 

FR 53506 (Nov. 18, 1975). 

406Promulgation of Trade Regulation Rule and 

Statement of Basis and Purpose: Mail Order 

Merchandise, 40 FR 51582 (Nov. 5, 1975). 

407Magnuson-Moss Warranty—Federal Trade 

Commission Improvement Act, Public Law 93–637, 

sec. 202, sec. 18(c)(1), 88 Stat. 2183, 2198 (1975) 

(Specifically, section 18(c)(1) provided that ‘‘[a]ny 

proposed rule under section 6(g)’’ with certain 

components that were ‘‘substantially completed 

before’’ section 18’s enactment ‘‘may be 

promulgated in the same manner and with the same 

validity as such rule could have been promulgated 

had this section not been enacted.’’). 

408Federal Trade Commission Improvements Act 

of 1980, Public Law 96–252, sec. 15, sec. 22, 94 

Stat. 374, 388 (1980) (codified at 15 U.S.C. 57b–3). 

409 15 U.S.C. 57b–3(b). 

581 15 U.S.C. 57b–3(a). 

411See, e.g., Franchise Rule, 16 CFR part 436; 

Business Opportunity Rule, 16 CFR part 437; 

Funeral Rule, 16 CFR part 453; Negative Option 

Rule, 16 CFR part 425; Cooling Off Rule, 16 CFR 

part 429; see also discussion supra section IV.1.a. 

412See, e.g., 16 CFR 437.6(d), (h), (i) (The 

Business Opportunity Rule provides that it is an 

‘‘unfair or deceptive act or practice’’ to 

misrepresent, among other information, ‘‘the 

amount of sales, or gross or net income or profits 

a prospective purchaser may earn’’; ‘‘the cost, or the 

performance, efficacy, nature, or central 

characteristics of the business opportunity or the 

goods or services offered’’; or ‘‘any material aspect 

of any assistance offered to a prospective 

purchaser’’); 16 CFR 436.9(a) and (c) (The Franchise 

Rule provides that it is an ‘‘unfair or deceptive act 

or practice’’ to ‘‘[m]ake any claim or representation 

. . . that contradicts’’ the required disclosures, 

which include certain pricing information and fees, 

or to ‘‘[d]isseminate any financial performance 

representations to prospective franchisees unless 

the franchisor has a reasonable basis and written 

substantiation for the representation[.]’’). 

413See, e.g., Harry & Bryant Co. v. FTC, 726 F.2d 

993, 999–1001 (4th Cir. 1984) (holding that 

petitioners challenging Funeral Rule were not 

denied procedural due process, and that the rule 

was within the Commission’s statutory authority 

and supported by substantial evidence); Am. Fin. 

Servs. Ass’n v. FTC, 767 F.2d 957, 983–88, 991 (D.C. 

Cir. 1985) (holding that the FTC did not exceed its 

authority when promulgating the Trade Regulation 

Rule on Credit Practices under sections 5 and 18 of 

the FTC Act, and that the rule was supported by 

substantial evidence and not arbitrary, capricious, 

or an abuse of discretion); Consumers Union of 

U.S., Inc. v. FTC, 801 F.2d 417, 422, 426 (D.C. Cir. 

1986) (denying petition for review of FTC Used Car 

Rule and holding that Commission’s decision to 

omit a proposed disclosure requirement from the 

rule had evidentiary support under both the FTC’s 

substantial evidence test and the APA’s arbitrary 

and capricious test, which are one and the same as 

to the requisite degree of evidence); Pa. Funeral 

Dirs. Ass’n v. FTC, 41 F.3d 81, 92 (3d Cir. 1994) 

(denying petition for review of Funeral Rule and 

finding that Commission decision to regulate casket 

handling fees was not arbitrary or capricious and 

was supported by substantial evidence). 

414West Virginia v. EPA, 597 U.S. at 724. 

415FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

section 5 and granted the Commission 

authority to promulgate rules to 

effectuate the Act’s provisions in section 

6(g), including the prohibition on unfair 

methods of competition.401 The Act did 

not expressly prohibit deception. While 

deception could qualify as an unfair 

method of competition, courts required 

the Commission to show harm to 

competition or rivals in each instance; 

harm to consumers alone was 

insufficient to meet the standard.402 In 

response, Congress amended the FTC 

Act in 1938 to include a prohibition, not 

just against unfair methods of 

competition, but against unfair or 

deceptive acts or practices as well.403

Congress affirmed the Commission’s 

authority to issue rules like the one here 

through amendments to the FTC Act in 

1975 and 1980. First, in the MagnusonMoss Warranty Act of 1975, Congress 

added section 18 of the FTC Act, 15 

U.S.C. 57a, confirming the 

Commission’s authority to issue rules 

that ‘‘define with specificity acts or 

practices which are unfair or deceptive 

acts or practices,’’ and requiring the 

Commission to follow specific 

procedures for promulgating rules.404

Among the substantially completed 

rules at the time were the Rule on the 

Preservation of Consumers’ Claims and 

Defenses 405 and the Mail Order Rule,406

which proposed to define as an unfair 

or deceptive act—and upon 

promulgation did so define—certain 

conduct that the rulemaking record 

showed was causing harm across 

various industries. As Congress added 

procedural requirements to the 

Commission’s rulemaking authority 

through section 18, Congress did not 

limit these existing cross-industry rules 

targeting unfair or deceptive acts or 

practices, but instead created an 

exception under which the Commission 

could finalize them without following 

section 18’s procedural requirements.407

Congress again confirmed the 

Commission’s authority to promulgate 

rules defining unfair and deceptive acts 

or practices in 1980 when it enacted 

section 22 of the FTC Act, 15 U.S.C. 

57b–3(b), as part of the Federal Trade 

Commission Improvements Act of 

1980.408 Section 22 imposes certain 

additional procedural requirements the 

Commission must follow when it 

promulgates any ‘‘rule,’’ including rules 

promulgated under section 18. Section 

22(b) contemplates the FTC’s authority 

to promulgate rules that are substantive 

and economically significant by 

requiring, for example, that the 

Commission conduct a cost-benefit 

analysis.409 In addition, section 22(a) 

imposes the same requirements on 

amendments to existing rules if they 

may ‘‘have an annual effect on the 

national economy of $100,000,000 or 

more,’’ ‘‘cause a substantial change in 

the cost or price of goods or services,’’ 

or ‘‘have a significant impact upon’’ 

persons and consumers.410 Thus, 

Congress explicitly authorized the 

Commission to issue rules and 

amendments that address major 

economic questions, so long as the 

rulemaking complies with section 22. 

The Commission has exercised its 

authority to promulgate numerous rules 

and rule amendments defining unfair or 

deceptive acts or practices pursuant to 

sections 18 and 22.411 Central to many 

of these rules is a rulemaking record 

establishing that businesses 

misrepresent or fail to disclose certain 

material terms in a transaction, 

including information related to price, 

and that these practices are unfair or 

deceptive.412 Unlike in West Virginia v. 

EPA, courts have upheld Commission 

rules similar to the one here—that 

prohibit misrepresentations, define 

unfair or deceptive conduct, and require 

specific disclosures to avoid 

deception—against a myriad of legal 

challenges.413

In sum, this is a far cry from a 

situation where Congress 

‘‘conspicuously and repeatedly’’ 

declined to grant the agency the claimed 

power.414 Quite the opposite—Congress 

has conspicuously and repeatedly 

confirmed that promulgating a rule like 

this final rule is precisely how Congress 

expects the Commission to use its 

rulemaking authority. For these reasons, 

even if the final rule involves a major 

question, Congress has clearly delegated 

to the Commission the authority to 

address that question. 

B. Non-Delegation Doctrine 

One commenter contended that the 

Commission’s issuance of the rule 

violates the non-delegation doctrine.415

The commenter argued that, given the 

rule’s breadth, section 5 lacks an 

intelligible principle if it authorizes the 

Commission to promulgate the rule. The 

commenter asserted that the rule 

regulates pricing economy-wide and 

that Congress has not made ‘‘the 

necessary fundamental policy-decision’’ 

underlying the rule. The commenter 


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416 Id. (citing Gundy, 588 U.S. at 159 (Gorsuch, J., 

dissenting, joined by Roberts, C.J. and Thomas, J.)). 

417FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

418 Gundy, 588 U.S. at 130 (plurality op.) (quoting 

Mistretta v. United States, 488 U.S. 361, 373 n.3 

(1989)). 

419U.S. Const. art. I, sec. 1; see also, e.g., 

Mistretta, 488 U.S. at 372. 

420 Gundy, 588 U.S. at 146. 

421 Id. at 135 (quoting Mistretta, 488 U.S. at 372). 

422 Id. (quoting J.W. Hampton, Jr., & Co. v. United 

States, 276 U.S. 394, 409 (1928)) (brackets in 

original). 

423A.L.A. Schechter, 295 U.S. at 532–33. In so 

holding, the Supreme Court in A.L.A. Schechter 

referred to cases in which both unfair and deceptive 

practices were determined to be unfair methods of 

competition. 295 U.S. at 532–33 (citing FTC v. R.F. 

Keppel, 291 U.S. 304 (1934) and FTC v. Algoma 

Lumber Co., 291 U.S. 67 (1934)). Congress later 

clarified in the Wheeler-Lea Act of 1938 that unfair 

and deceptive practices are unlawful under the FTC 

Act independent of any effect they may have on 

competition. 52 Stat. 111. Accordingly, the A.L.A. 

Schechter Court’s conclusion that Congress’s grant 

of authority to the Commission is guided by 

intelligible principles applies equally to the 

Commission’s authority to identify unfair or 

deceptive acts or practices and to the Commission’s 

authority to identify unfair methods of competition. 

424A.L.A. Schechter, 295 U.S. at 533–36. 

425 15 U.S.C. 57a(b)(1)–(2). Section 18 requires 

both an advance notice of proposed rulemaking and 

a notice of proposed rulemaking to engage with and 

solicit comment from interested parties. 

426Nat’l Petroleum Refiners Ass’n v. FTC, 482 

F.2d 672, 681–83 (D.C. Cir. 1973). 

427 15 U.S.C. 45(n). 

428Fed. Trade Comm’n, FTC Policy Statement on 

Deception, 103 F.T.C. 174, 175 (1984) (sent by letter 

to Congress on October 14, 1983 and appended to 

In re Cliffdale Assocs., Inc., 103 F.T.C. 110, 174 

(1984) (hereinafter ‘‘Deception Policy Statement’’), 

https://www.ftc.gov/system/files/ftc_gov/pdf/ 

Cliffdale-Assocs-103-FTC-110.pdf. 

429 FTC v. Colgate-Palmolive Co., 380 U.S. 374, 

387 (1965); Zauderer v. Office of Disciplinary 

Counsel, 471 U.S. 626, 645–46 (1985). 

also asserted that the Commission’s 

authority to promulgate the rule is an 

unconstitutional delegation under a 

‘‘history and tradition test,’’ citing to a 

dissenting opinion in Gundy v. United 

States, 588 U.S. 128 (2019).416 The 

Commission disagrees. The Commission 

notes that this commenter’s argument 

that the proposed rule violated the nondelegation doctrine was predicated on 

its assertion that the proposed rule 

regulated ‘‘the disclosing and collecting 

[of] consumer fees for all 

businesses.’’ 417 Since the focus of the 

final rule is narrowed to covered goods 

or services, the comment may not be 

relevant to the final rule. Nevertheless, 

the Commission addresses the 

arguments herein. 

‘‘Only twice in this country’s history 

has the Court found a delegation 

excessive, in each case because 

‘Congress had failed to articulate any 

policy or standard’ to confine 

discretion.’’ 418 Article I of the 

Constitution vests the Federal 

government’s legislative powers in 

Congress, and Congress may not 

delegate those powers to an executive 

agency absent an intelligible principle 

to guide the exercise of discretion.419

The ‘‘intelligible principle’’ standard is 

‘‘not demanding.’’ 420 This is because of 

the practical understanding that ‘‘ ‘in 

our increasingly complex society, 

replete with ever changing and more 

technical problems,’ . . . ‘Congress 

simply cannot do its job absent an 

ability to delegate power under broad 

general directives.’ ’’ 421 For that reason, 

the Supreme Court has repeatedly held 

that ‘‘a statutory delegation is 

constitutional as long as Congress ‘lay[s] 

down by legislative act an intelligible 

principle to which the person or body 

authorized to [exercise the delegated 

authority] is directed to conform.’ ’’ 422

As described throughout section IV.A, 

Congress, the Commission, and the 

courts have long understood the 

Commission’s mandate to prevent both 

unfair and deceptive acts or practices as 

providing intelligible principles to 

guide the exercise of the Commission’s 

discretion. In A.L.A. Schechter Poultry 

Corp. v. United States, 295 U.S. 495 

(1935), the Court observed that conduct 

that fell within the ambit of section 5 of 

the FTC Act was ‘‘to be determined in 

particular instances, upon evidence, in 

the light of particular competitive 

conditions and of what is found to be a 

specific and substantial public 

interest.’’ 423 The Court ultimately 

concluded that Congress properly 

delegated authority to the FTC under 

the FTC Act based, among other things, 

on the subject matter and procedural 

requirements Congress placed on the 

Commission—which involves ‘‘notice 

and hearing,’’ ‘‘appropriate findings of 

fact supported by adequate evidence,’’ 

and ‘‘judicial review.’’ 424

FTC rulemaking under section 18 

features similar procedural safeguards to 

FTC adjudication and thus comports 

with the nondelegation doctrine for the 

same reasons. For example, section 18’s 

rulemaking process requires the 

Commission to: (1) notify Congress; (2) 

publish multiple public notices of the 

proposed rulemaking; (3) provide all 

interested persons the opportunity to 

‘‘submi[t] . . . written data, views, or 

arguments’’; (4) consider all 

submissions; (5) provide the 

opportunity for an informal hearing; (6) 

determine, based on all available 

information, that the unfair or deceptive 

acts or practices are prevalent; and (7) 

determine, based on the rulemaking 

record, that the final rule is appropriate. 

In addition, once the rule is finalized, it 

is subject to judicial review in a court 

of appeals.425 The rulemaking process 

thus ‘‘may actually be fairer to regulated 

parties than total reliance on case-bycase adjudication’’ because the process 

allows all interested parties the 

opportunity to weigh in by submitting 

data, views, and arguments and by 

participating in a hearing.426 In this 

rulemaking, interested parties had 

numerous opportunities to be heard by 

the Commission, including through 

ninety-day public comment periods on 

both an advance notice of proposed 

rulemaking and a notice of proposed 

rulemaking, as well as an informal 

hearing. These procedures helped to 

ensure that the Commission properly 

applied its statutory mandate when 

adopting the rule to prevent prevalent 

unfair and deceptive practices 

concerning hidden and misleading fees. 

Like the FTC’s Act’s procedural 

requirements, the subject matter 

requirements that apply to the FTC’s 

statutory authority are well established. 

With respect to unfairness, Congress 

articulated in section 5(n) of the FTC 

Act the factors the Commission must 

apply.427 For deception, virtually all 

courts have adopted the three-part test 

put forward by the Commission in its 

Deception Policy Statement: (1) there is 

a representation, omission, or practice 

that (2) is likely to mislead consumers 

acting reasonably under the 

circumstances, and (3) the 

representation, omission, or practice is 

material.428 For decades, courts have 

reviewed and upheld the Commission’s 

application of unfairness and deception 

authority in enforcement actions and 

rules. Moreover, the Supreme Court has 

recognized the ability of regulators, 

courts, and regulated entities to 

distinguish deceptive from 

nondeceptive claims or advertisements 

under section 5 of the FTC Act.429 In 

sum, the subject matter requirements of 

the FTC Act’s statutory authority as to 

unfair and deceptive practices are well 

settled. 

Finally, the Supreme Court has not 

adopted the commenter’s suggested 

‘‘history and tradition test’’ as the 

applicable standard for determining 

whether congressional delegation of 

authority is constitutional. The 

intelligible principle test is binding 

precedent on that question, and the final 

rule complies with the intelligible 

principle test. 

C. First Amendment 

Some commenters argued that § 464.2 

impermissibly prohibits and compels 

speech in violation of the First 


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430See, e.g., FTC–2023–0064–3028 (Competitive 

Enterprise Institute); FTC–2023–0064–3238 

(Gibson, Dunn & Crutcher LLP); FTC–2023–0064– 

3233 (NCTA—The internet and Television 

Association); FTC–2023–0064–3016 (National 

Federation of Independent Business). In opposing 

§ 464.2, the commenters did not argue that § 464.3, 

which simply prohibits misrepresentations related 

to prices and fees, implicates the First Amendment. 

431E.g., FTC–2023–0064–3028 (Competitive 

Enterprise Institute provided examples of pricing 

information it argued was not unfair or deceptive 

that involve drip pricing with disclaimers, 

contingent pricing, and partition pricing.) The 

Commission addresses in section III.B.1 when and 

to what extent the rule covers these types of 

information and also explains why the omission of 

Total Price is unfair and deceptive in those 

circumstances. 

432FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

433FTC–2023–0064–3275 (Berkeley Law Center 

for Consumer Law & Economic Justice et al.). 

434FTC–2023–0064–3028 (Competitive Enterprise 

Institute); FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

435FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

436FTC–2023–0064–3016 (National Federation of 

Independent Business). 

437FTC–2023–0064–3028 (Competitive Enterprise 

Institute). 

438FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

439FTC–2023–0064–3128 (Merchants Payments 

Coalition). 

440FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP); FTC–2023–0064–3233 (NCTA—The 

Internet & Television Association). 

441FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP ‘‘assume[d]’’ that in allowing 

government charges to be excluded from Total 

Price, the Commission aims to ‘‘rais[e] tax 

revenues’’ because the Commission believes 

‘‘disclosing a tax upfront will lead to fewer people 

making purchases, resulting in a decline in 

revenue’’). The commenter did not address the fact 

that the Commission does not have authority over 

taxation, or whether the commenter’s proposed 

alternative of raising marginal tax rates would fulfill 

the Commission’s goal in this rulemaking of 

preventing unfair or deceptive conduct related to 

mandatory fees and charges. The Commission finds 

that marginally raising the tax rate is not a viable 

alternative because the Commission does not have 

taxing authority and raising the tax rate would not 

achieve the Commission’s stated goal of preventing 

unfair or deceptive conduct. 

442FTC–2023–0064–3016 (National Federation of 

Independent Business); FTC–2023–0064–3028 

(Competitive Enterprise Institute). 

443Cent. Hudson Gas & Elec. Corp., 447 U.S. at 

564. 

444Bd. of Trs. of State Univ. of N.Y. v. Fox, 492 

U.S. 469, 480 (1989) (internal citations omitted). 

445Zauderer, 471 U.S. at 650–53; Nat’l Inst. of 

Family & Life Advocates v. Becerra (‘‘NIFLA’’), 585 

Amendment.430 The Commission 

disagrees. The rule addresses unfair and 

deceptive conduct and does not 

otherwise affect businesses’ ability to 

express truthful and accurate price 

information. 

1. Comments 

Some commenters argued the rule’s 

disclosure requirements compel speech 

in violation of the First Amendment. 

Some commenters also contended that 

§ 464.2 would prohibit businesses from 

advertising aspects or parts of truthful 

and accurate price information. They 

argued that conditioning the ability to 

provide some truthful information— 

such as a partial price without including 

certain fees—on total price being 

disclosed violates the First 

Amendment.431 Commenters asserted 

that consumers are not injured where a 

business presents a price that omits fees 

or fails to add up the fees for the 

consumer. They argued that this type of 

price information is useful and truthful 

even if it is only partial. A commenter 

argued that how the price of goods and 

services is displayed is a message under 

the First Amendment and the rule’s 

requirement that total price be 

displayed clearly and conspicuously is 

unconstitutional compelled speech.432

One academic commenter supported the 

rule and argued it does not 

unconstitutionally compel speech 

because it only requires disclosure of 

factual, non-controversial information, 

without which the prices disclosed or 

advertised would be misleading.433

Some commenters argued the 

requirement to disclose total price 

clearly and conspicuously should be 

subject to strict scrutiny,434 while others 

argued it should be reviewed under a 

heightened scrutiny standard 435 or 

intermediate scrutiny.436 One 

commenter argued that the rule is a 

content-based regulation subject to strict 

scrutiny because, where a business 

presents any type of price information, 

it is required to display total price and 

in a particular way—i.e., clearly, 

conspicuously, and prominently.437 The 

commenter argued that the Commission 

failed to demonstrate the rule directly 

advances any compelling government 

interest. Another commenter argued that 

price information is commercial speech 

subject to intermediate scrutiny and that 

the rule fails to meet the standard 

because, even if some price displays 

without total price are deceptive, not all 

such displays are deceptive.438

Some commenters asserted that the 

rule’s application to credit card 

surcharges and government charges 

violated the First Amendment. An 

industry commenter interpreted the rule 

to require all credit card surcharges to 

be included in total price. The 

commenter argued that this amounts to 

a ban on presenting credit card 

surcharges to consumers, which is 

regulation of commercial speech that 

violates merchants’ First Amendment 

rights. The commenter cited to several 

State laws banning credit card 

surcharges or fees, but allowing cash 

discounts, that were struck down by 

Federal courts of appeals.439 Two 

commenters argued that the rule’s 

allowance for government charges to be 

excluded from total price—while other 

fees or charges cannot be excluded— 

amounts to content-based regulation of 

speech that provides preferential 

treatment to the government.440 One 

commenter argued that the rule would 

allow businesses to conceal government 

charges and shows favoritism for 

government speech to assist it in raising 

tax revenues; the commenter proposed 

the alternative of marginally raising the 

tax rate.441 The commenter also argued 

that the rule is underinclusive because 

total price does not include government 

charges, arguing that consumers suffer 

the same harm of being surprised by 

government fees as with nongovernment charges required to be 

included in total price. Finally, other 

commenters recommended that the 

Commission adopt a rule that only 

prohibits deceptive conduct without 

requiring specific affirmative 

disclosures.442

2. Legal Standard 

The Commission finds that 

businesses’ First Amendment rights are 

adequately protected because § 464.2’s 

compelled disclosures are in a 

commercial context and meet the 

longstanding legal standards governing 

commercial speech. Courts apply one of 

two standards in the context of 

commercial speech. In Cent. Hudson 

Gas & Electric Corp. v. Pub. Serv. 

Comm’n of N.Y., 447 U.S. 557, 563–64 

(1980), the Supreme Court established 

the analytical framework for 

determining the constitutionality of a 

regulation of commercial speech that is 

not misleading and does not involve 

illegal activity. Under that framework, 

described as intermediate scrutiny, the 

regulation must: (1) serve a substantial 

governmental interest; (2) directly 

advance this interest; and (3) not be 

more extensive than necessary to serve 

the government’s interests.443 The third 

prong does not require the government 

to adopt the least restrictive means. 

Instead, it simply calls for a ‘‘ ‘fit’ 

between the legislature’s ends and the 

means chosen to accomplish those ends 

. . . a fit that is not necessarily perfect, 

but reasonable.’’ 444

The Supreme Court’s ‘‘precedents 

have applied a lower level of scrutiny to 

laws that compel disclosures in certain 

contexts,’’ such as in commercial 

speech, as set forth in Zauderer v. Office 

of Disciplinary Counsel, 471 U.S. 626 

(1985).445 Contrary to commenters’ 


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U.S. 755, 768 (2018); see also Milavetz, Gallop & 

Milavetz P.A. v. United States, 559 U.S. 229, 249– 

50 (2010) (applying ‘‘the less exacting scrutiny 

described in Zauderer’’ and upholding a 

requirement that advertisements include a 

disclosure ‘‘intended to combat the problem of 

inherently misleading commercial 

advertisements’’). 

446Zauderer, 471 U.S. at 653; see also Am. Meat 

Inst. v. USDA, 760 F.3d 18, 22–23 (D.C. Cir. 2014) 

(en banc) (holding Zauderer applies to compelled 

commercial speech in service of government 

interests in addition to preventing and correcting 

deception); CTIA—The Wireless Ass’n v. City of 

Berkeley, 928 F.3d 832, 844 (9th Cir. 2019) (holding 

Zauderer applies to compelled commercial health 

and safety disclosures if they further a substantial 

government interest) (citing Central Hudson Gas & 

Elec. Corp., 447 U.S. at 564; NIFLA, 585 U.S. at 768, 

775)); Pharm. Care Mgmt. Ass’n v. Rowe, 429 F.3d 

294, 310, 310 n.8 (1st Cir. 2005) (clarifying that the 

application of Zauderer is not limited to cases in 

which the compelled disclosure prevents deception 

and upholding compelled commercial disclosures 

based on government interests in preventing 

deception and ‘‘increasing public access to 

prescription drugs’’); Nat’l Elec. Mfrs. Ass’n v. 

Sorrell, 272 F.3d 104, 116 (2d Cir. 2001) (applying 

Zauderer to compelled commercial disclosure even 

though it ‘‘was not intended to prevent ‘consumer 

confusion or deception’ per se, . . . but rather to 

better inform consumers about the products they 

purchase’’) (internal citation and quotation marks 

omitted) (citing Zauderer, 471 U.S. at 651). 

447See Expressions Hair Design v. Schneiderman, 

581 U.S. 37, 48 (2017) (reviewing State law 

regulating disclosure of differentiation of prices for 

credit card versus other types of payment and 

remanding for determination of whether the statute 

‘‘is a valid commercial speech’’ regulation); City of 

Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 

422 (1993) (‘‘Most of the appellee’s mailings 

consisted primarily of price and quantity 

information, and thus fell within the core notion of 

commercial speech—speech which does ‘no more 

than propose a commercial transaction.’’’) (cleaned 

up) (citing Bolger v. Young’s Prods. Corp., 463 U.S. 

60, 66 (1983)); see generally Cent. Hudson Gas & 

Elec. Corp., 447 U.S. at 561 (referring to commercial 

speech as ‘‘expression related solely to the 

economic interests of the speaker and its 

audience’’); Va. State Bd. of Pharmacy v. Va. 

Citizens Consumer Council, Inc., 425 U.S. 748, 762 

(1976) (commercial speech includes speech that 

does ‘‘no more than propose a commercial 

transaction’’ (internal citations omitted)); see also 

Bates v. State Bar of Ariz., 433 U.S. 350, 383 (1977) 

(‘‘the advertiser knows his product and has a 

commercial interest in its dissemination’’; ‘‘any 

concern that strict requirements for truthfulness 

will undesirably inhibit spontaneity seems 

inapplicable because commercial speech generally 

is calculated. Indeed, the public and private 

benefits from commercial speech derive from 

confidence in its accuracy and reliability.’’). 

448Zauderer, 471 U.S. at 651–53; see also NIFLA, 

585 U.S. at 768–69 (restating the Zauderer standard, 

noting that ‘‘purely factual and uncontroversial 

information about the terms under which . . . 

services will be available . . . should be upheld 

unless they are unjustified or unduly burdensome’’ 

(internal citations omitted)). 

449Zauderer, 471 U.S. at 651. 

450 Id. at 653. 

451 Id. at 650–51 (internal quotation omitted). 

452 15 U.S.C. 45, 57a. 

453Zauderer, 471 U.S. at 650. 

454FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

455 303 Creative, 600 U.S. at 587–88. 

assertions, compelled speech in the 

commercial context is neither 

unequivocally prohibited nor subject to 

strict scrutiny under the First 

Amendment. Rather, the First 

Amendment permits required 

disclosures that are: (1) factual and 

uncontroversial; (2) reasonably related 

to the government’s interest—here, 

preventing unfair and deceptive 

commercial practices that harm 

consumers; and (3) not ‘‘unjustified or 

unduly burdensome.’’ 446 The final 

rule’s disclosure requirements satisfy 

these parameters. 

3. The Rule’s Disclosure Requirements 

Are Constitutional Under Zauderer 

Section 464.2 applies to speech that 

is, at its core, commercial—the 

disclosure and advertising of the price 

for goods and services.447 It requires 

precisely the type of disclosure the 

Supreme Court has confirmed is 

constitutional under Zauderer.448 In 

Zauderer, the Supreme Court 

considered a challenge to governmentcompelled commercial speech in an 

advertisement by an attorney. The 

advertisement stated that certain types 

of cases were handled on a contingent 

fee basis for which the client owed no 

legal fees if the lawsuit was 

unsuccessful. The State required such 

advertisements to disclose that clients 

may be liable for litigation costs even if 

their lawsuit is unsuccessful. The 

attorney argued such a requirement was 

compelled speech in violation of the 

First Amendment. The Supreme Court 

disagreed. Noting that the disclosure 

applied to commercial advertising, the 

Court held that an advertiser’s 

‘‘constitutionally protected interest in 

not providing any particular factual 

information in his advertising is 

minimal.’’ 449 The Court concluded, 

‘‘The State’s position that it is deceptive 

to employ advertising that refers to 

contingent-fee arrangements without 

mentioning the client’s liability for costs 

is reasonable enough to support a 

requirement that information regarding 

the client’s liability for costs be 

disclosed.’’ 450 The Court also noted that 

attorneys were not prevented from 

conveying information to the public— 

they were merely required ‘‘to provide 

somewhat more information than they 

might otherwise be inclined to present 

. . . in order to dissipate the possibility 

of consumer confusion or 

deception.’’ 451

Section 464.2 satisfies all prongs of 

Zauderer. First, § 464.2 only requires 

businesses to disclose factual and 

noncontroversial pricing information, 

by incorporating known mandatory fees 

or charges into total price, with 

exceptions, and by disclosing certain 

other customary pricing information 

before a consumer consents to pay. As 

described in section II.B, the purpose of 

the rule is to ensure that consumers 

know the total amount they will have to 

pay because this information is material 

to consumer decision making. 

Second, parts II.B and III lay out in 

detail how the rule is reasonably related 

to—and, in fact, directly advances—the 

government’s interest in preventing 

unfairness and deception in the 

marketplace. Preventing unfair and 

deceptive conduct is the Commission’s 

mandate under sections 5 and 18 of the 

FTC Act.452 And based on voluminous 

comments from the public as well as 

significant empirical evidence, the 

Commission finds that consumers 

seeking to purchase covered goods or 

services are likely to be deceived and 

harmed if the required disclosures are 

not made. 

Finally, § 464.2 is neither unduly 

burdensome nor unjustified. The 

Commission set forth the justification 

for the required disclosures in parts II 

and III, including the harms to 

consumers and to competition from drip 

or partitioned pricing. Further, the rule 

does not impose an undue burden; 

businesses offering covered goods or 

services are simply required ‘‘to provide 

somewhat more information than they 

might otherwise be inclined to 

present.’’ 453 The rule merely requires 

clear and conspicuous display of total 

price if other pricing information is 

displayed, and requires certain pricing 

and informational disclosures before the 

consumer consents to pay. As described 

in detail in section III, the final rule 

permits businesses to exclude from total 

price certain mandatory fees or charges 

that industry commenters stated would 

be impractical or burdensome for 

inclusion in total price. 

The Commission disagrees with a 

commenter who seemed to argue that 

because the rule imposes disclosure 

requirements as to ‘‘how’’ total price is 

displayed, the rule ‘‘offends the First 

Amendment’’ by compelling speech.454

In so arguing, the commenter cited to 

303 Creative, LLC v. Elenis, 600 U.S. 570 

(2023). The Supreme Court in 303 

Creative considered an as-applied 

challenge to the Colorado AntiDiscrimination Act (‘‘CAD’’) by a sole 

proprietor who designed individualized 

websites the Court concluded ‘‘qualify 

as pure speech,’’ with each website 

being an ‘‘original, customized 

creation.’’ 455 While the Court in that 

case held that the CAD violated the First 

Amendment as applied to the plaintiff, 

the rule here is distinguishable from the 

facts of 303 Creative. First, both price 


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456See cases cited supra note 447 (defining 

commercial speech). 

457 303 Creative, 600 U.S. at 593–94. 

458Zauderer, 471 U.S. at 650. 

459Of course, Businesses offering, displaying, or 

advertising a Covered Good or Service cannot 

misrepresent the nature, purpose, amount, or 

refundability of any fee or charge under § 464.3; this 

requirement is consistent with the First 

Amendment. See Ibanez v. Fla. Dep’t of Bus. & 

Prof’l. Regul., 512 U.S. 136, 142 (1994) (‘‘false, 

deceptive, or misleading commercial speech may be 

banned’’ (citations omitted)). Commenters did not 

argue § 464.3 violates the First Amendment. 

460Zauderer, 471 U.S. at 650. 

461 Indeed, the Zauderer Court noted that 

‘‘because disclosure requirements trench much 

more narrowly on an advertiser’s interests than do 

flat prohibitions on speech, ‘warning[s] or 

disclaimer[s] might be appropriately required . . . 

in order to dissipate the possibility of consumer 

confusion or deception.’ ’’ Id. at 651 (citation 

omitted). 

462Cent. Hudson Gas & Elec. Corp., 447 U.S. at 

566. 

463See id. at 570–71 (‘‘To further its policy of 

conservation, the Commission could attempt to 

restrict the format and content of Central Hudson’s 

advertising. It might, for example, require that the 

advertisements include information about the 

relative efficiency and expense of the offered 

service, both under current conditions and for the 

foreseeable future.’’). 

464Zauderer, 471 U.S. at 652–53. 

and how price is displayed (here, how 

total price is displayed) relate solely to 

proposing a commercial transaction and 

to the economic interests of the speaker 

and its audience.456 Second, the Court 

based its decision in 303 Creative on the 

unique nature of the plaintiff’s work, 

noting the plaintiff ‘‘does not seek to 

sell an ordinary commercial good.’’ 457

In comparison, the rule merely requires 

the display of the total price of a 

covered good or service—live-event 

tickets and short-term lodging—which 

is core commercial speech. 

Therefore, the Commission finds that 

the disclosure requirements are 

consistent with the compelled speech 

analysis under Zauderer. Clear, 

conspicuous, and prominent disclosure 

of total price in advertisements, 

displays, or offers, and the disclosure of 

complete pricing information of covered 

goods or services before the consumer 

consents to pay, directly advance the 

Commission’s interest in preventing 

deception and harm. The rule’s 

requirements enable consumers to 

receive the information they need to 

make informed purchasing decisions 

about live-event tickets and short-term 

lodging based on complete and truthful 

information. 

4. The Rule Does Not Prohibit Truthful 

Speech 

Commenters asserted that the rule 

amounts to a prohibition on the display 

of truthful price information in violation 

of the First Amendment because the 

rule prohibits certain information (like 

partial prices without mandatory fees) 

from being displayed without 

displaying total price. Commenters also 

asserted that, because the rule prohibits 

certain displays of price, like parts of 

prices without fees, it should be 

evaluated under Central Hudson. The 

Commission disagrees. First, the 

commenters ‘‘overlook[ ] material 

differences between disclosure 

requirements and outright prohibitions 

on speech.’’ 458 The rule does not 

prevent businesses from conveying 

information to the public and, in 

particular, it does not prohibit the 

disclosure of the components of total 

price. Businesses remain free to 

describe, disclose, or convey price, fee, 

and charge information.459 Put 

differently, the rule permits any truthful 

pricing claims an advertiser wants to 

make; what it forbids is half-truths that 

omit total price. 

Section 464.2 does require a business 

that displays certain pricing information 

about covered goods or services to also 

provide factual and non-controversial 

information in the form of total price. 

Although total price may be ‘‘somewhat 

more information than they might be 

otherwise inclined to present,’’ such a 

requirement is allowed by Zauderer.460

With the rule’s requirement that total 

price be clear, conspicuous, and 

prominent, the Commission balances 

industry commenters’ stated desire to 

display other price information with its 

finding that total price is a necessary 

piece of price information for 

consumers if any other price 

information is displayed.461

Because the rule does not restrict 

truthful speech, and because the 

conduct the rule addresses (advertising 

prices without mandatory fees) is 

deceptive, the Commission need not 

apply the Central Hudson factors. 

Nevertheless, the rule would meet them. 

Under Central Hudson, the regulation 

must serve a substantial governmental 

interest, must directly advance that 

interest, and must not be more extensive 

than necessary to serve the 

government’s interest.462 As outlined in 

parts II and III, the rule serves the 

substantial governmental interest of 

providing material price information to 

consumers purchasing live-event tickets 

and short-term lodging to allow them to 

make accurate price comparisons and 

informed purchasing decisions, and to 

allow businesses to compete on price in 

a level playing field. And consistent 

with the third prong of Central Hudson, 

the rule is no more extensive than 

necessary to serve the government’s 

interests in preventing unfairness, 

deception, and harm, as the rule simply 

requires clear, conspicuous, and 

prominent display of total price. Central 

Hudson acknowledges that the 

government can regulate the format of 

advertising, including by requiring a 

disclosure.463

The Commission also disagrees with 

commenters arguing the rule violates is 

overinclusive and would prohibit some 

displays of partial price that are not 

deceptive or unfair without the display 

of total price. Again, because truthful 

itemization of price components is not 

prohibited by the rule, commenters’ 

contention that the rule is a prohibition 

on speech misses the mark. The 

Commission finds, however, that the 

display of the price of a good or service 

without disclosing total price clearly, 

conspicuously, and prominently is 

unfair and deceptive and harms 

consumers and honest competitors. 

Because the third prong of Central 

Hudson does not require the 

government to use the least restrictive 

means necessary to advance its interest, 

the rule would be constitutional even if 

it prohibited displaying partial price in 

instances that, in isolation, may not be 

unfair or deceptive. The same is true 

under Zauderer, where the Court held 

that the State’s ‘‘assumption that 

substantial numbers of potential clients 

would be . . . misled’’ about the 

possibility that they would be 

responsible for litigation costs—in 

contrast to proving that all potential 

clients would be misled—was sufficient 

to meet the standard.464

The Commission addresses in section 

III commenters who argued that it 

should adopt alternative policies, such 

as prohibiting misrepresentations and 

allowing businesses to disclose amounts 

or fees as they wish. As relevant here, 

commenters argued that the 

Commission should adopt those 

alternatives because they would not 

violate the First Amendment. The 

Commission finds that the rule, 

including § 464.2, does not violate the 

First Amendment. Given the 

Commission’s finding that failure to 

disclose total price is unfair and 

deceptive, the rule’s affirmative 

disclosure requirements are needed to 

achieve the Commission’s goal of 

preventing this unfair and deceptive 

conduct. 


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465The Commission modifies the definition of 

‘‘Government Charges’’ from those fees or charges 

‘‘imposed on consumers’’ to those ‘‘imposed on the 

transaction’’ to limit the potential distinction 

between fees and charges imposed directly on 

consumers and those imposed on Businesses. See 

supra section III.A.5. 

466FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

467 Id. 

468Humphrey’s Executor, 295 U.S. at 624–32. 

469See FTC v. Am. Nat’l Cellular, Inc., 810 F.2d 

1511, 1513–14 (9th Cir. 1987) (enactment of section 

13(b) of the FTC Act did not render Humphrey’s 

Executor inapposite). 

470Humphrey’s Executor, 295 U.S. at 625. 

471See Collins v. Yellen, 594 U.S. 220, 250 n.18 

(2021); Wiener v. United States, 357 U.S. 349, 353 

(1958). 

472FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

473Press Release, Fed. Trade Comm’n, FTC 

Announces Appointment of Jay L. Himes as New 

Administrative Law Judge (Mar. 12, 2024), https:// 

www.ftc.gov/news-events/news/press-releases/2024/ 

03/ftc-announces-appointment-jay-l-himes-newadministrative-law-judge. 

474 Initial notice of informal hearing; final notice 

of informal hearing; list of Hearing Participants; 

requests for submissions from Hearing Participants: 

Trade Regulation Rule on Unfair or Deceptive Fees, 

89 FR 21216 (Mar. 27, 2024); see also 16 CFR 0.8, 

1.13. 

5. The Rule’s Treatment of Credit Card 

Fees and Government Charges Does Not 

Violate the First Amendment 

The rule does not violate the First 

Amendment in its treatment of credit 

card fees and government charges. First, 

as noted in section III.B.1.c, the rule 

does not prohibit a business from 

charging or passing through credit card 

fees if otherwise allowed by law. The 

rule also does not affect State laws that 

prohibit credit card surcharges. Whether 

credit card charges must be included in 

total price depends on whether a 

business makes such fees mandatory. If 

a business offers consumers multiple 

viable payment methods for the offered 

transaction, so that paying with a credit 

card is optional, then credit card fees 

are not for a ‘‘mandatory ancillary good 

or service’’ under the rule and need not 

be included in total price. In addition, 

where credit card fees are mandatory, 

the rule does not prohibit businesses 

from itemizing them as long as they are 

also included in total price. 

Accordingly, there is no merit to 

commenters’ concerns that consumers 

will not understand the impact of costs 

affecting businesses, since businesses 

can itemize those costs under the rule. 

The Commission also disagrees with 

commenters’ argument that § 464.2 

violates the First Amendment as a 

content-based regulation because it does 

not require businesses to include 

government charges in total price. One 

commenter, who argued the point in 

detail, relied on Barr v. American Ass’n 

of Political Consultants, Inc., 591 U.S. 

610 (2020), in which the Supreme Court 

held that an exclusion for collectors of 

government debt from the Telephone 

Consumer Protection Act (‘‘TCPA’’), 

which generally prohibits robocalls, 

violated the First Amendment. A 

majority agreed that the exclusion for 

collectors of government debt was 

severable—the prohibition on robocalls 

was upheld. 

The exclusion provision in the TCPA 

addressed in Barr is distinguishable 

from the final rule in several ways. At 

the outset, the rule does not favor 

government charges unequivocally. 

While the rule allows businesses to 

exclude government charges from total 

price, it does not require businesses to 

do so. Businesses have a choice—they 

may include government charges in 

total price. Second, the commenter 

makes specific and erroneous 

assumptions about the Commission’s 

reasoning for excluding government 

charges from total price, such as that the 

Commission’s interest in adopting the 

rule includes favoring taxes and 

increasing tax revenue. Tax revenues 

have no bearing on the Commission’s 

decision to adopt this rule. As noted in 

section III.A.5, consumers have come to 

understand and expect sales tax to be 

added at the end of a purchase, and 

there are other Federal, State, and local 

laws that have specific requirements 

about disclosing taxes and other 

government charges. In addition, in 

many online transactions, businesses 

are unable to fully calculate certain 

components of government charges 

until a consumer provides their location 

information. Thus, the Commission has 

good reason to allow businesses to 

exclude government charges from total 

price if they choose.465

D. Commission Structure 

One commenter argued the 

Commission is unconstitutionally 

structured because the Commissioners 

are shielded from removal and asserts 

that Humphrey’s Executor v. United 

States, 295 U.S. 602 (1935), either no 

longer applies or was wrongly decided 

by the Supreme Court.466 The same 

commenter asserted that the 

Commission’s administrative law judges 

are unconstitutionally appointed by the 

Commission Chair and are 

unconstitutionally shielded from 

removal.467 The Commission disagrees. 

In Humphrey’s Executor, the Supreme 

Court addressed the crux of the 

commenter’s first argument and 

concluded that the Commission’s 

structure is constitutional. In that case, 

President Roosevelt sought to remove a 

Commissioner without cause. The Court 

held that the FTC Act authorized 

removal of Commissioners only on the 

grounds specified in the statute 

(‘‘inefficiency, neglect of duty, or 

malfeasance in office’’) and that this 

limitation on the President’s removal 

power was constitutional given the 

‘‘character of the [C]ommission and the 

legislative history which accompanied 

and preceded the passage of the act.’’ 468

The commenter’s arguments that 

Humphrey’s Executor is no longer 

applicable are unavailing. The Supreme 

Court’s decision is not rendered any less 

binding because Congress has refined 

the Commission’s authorities during the 

course of its more than 100-year 

tenure.469 The key policy rationale 

underlying Humphrey’s Executor 

remains valid today. The 

Commissioners collectively act as an 

adjudicatory body, and the for-cause 

removal standard ensures that they are 

free from ‘‘suspicion of partisan 

direction’’ or ‘‘political domination or 

control.’’ 470 Congress has similarly 

provided for-cause removal standards 

for the members of many other nonArticle III tribunals composed of 

multiple members who perform 

adjudicatory functions as an expert 

body within a specific area of the 

law.471

Next, the commenter incorrectly 

asserted that administrative law judges 

are appointed by the Chair and are 

unconstitutionally shielded from 

removal. The commenter argued that 

under Free Enter. Fund v. Pub. Co. 

Accounting Oversight Bd., 561 U.S. 477 

(2010), administrative law judges must 

be appointed by the full Commission 

and that the appointment process for 

administrative law judges at the FTC is 

unconstitutional because administrative 

law judges are appointed by the 

Commission Chair alone.472 The 

commenter is mistaken. The 

Commission voted in December 2023 to 

approve the appointment of 

Administrative Law Judge Jay L. 

Himes.473 The Chief Presiding Officer— 

here, the Chair pursuant to 16 CFR 0.8— 

then selected Judge Himes to be the 

presiding officer for this rulemaking, 

and Judge Himes was properly 

designated as the presiding officer in the 

Commission’s notice of informal 

hearing.474

In response to the commenter’s 

contention that the removal protections 

for the Commission’s administrative law 

judges are unconstitutional, the 

Commission notes that the Supreme 

Court has recognized in recent decisions 

that Congress may constitutionally 


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475See, e.g., Decker Coal Co. v. Pehringer, 8 F.4th 

1123, 1133–36 (9th Cir. 2021) (holding that 

administrative law judge removal protections are 

constitutional). 

476Collins, 594 U.S. at 250–51 (discussing Seila 

Law LLC v. CFPB, 591 U.S. 197 (2020)). 

477Seila Law, 591 U.S. at 217–18. 

478 Free Enter. Fund, 561 U.S. at 507 n.10. 

479 15 U.S.C. 57a(c)(1)(B); 16 CFR 1.13. 

480 Lucia v. SEC, 585 U.S. 237, 245 (2018) (in the 

‘‘Court’s basic framework for distinguishing 

between officers and employees[,] . . . an 

individual must occupy a ‘continuing’ position 

established by law to qualify as an officer . . . [and] 

‘exercise[ ] significant authority pursuant to the 

laws of the United States’ ’’ (citations omitted)). 

481 15 U.S.C. 57a; 16 CFR 0.14. 

482 16 CFR 1.13. 

483 16 CFR 1.9, 16 CFR 1.13(i), 16 CFR 1.14, 16 

CFR 1.25, 16 CFR 1.26(d). 

484 15 U.S.C. 57a(c). 

485 16 CFR 1.13(a)(2)(ii). 

486 16 CFR 1.13. 

487FTC–2023–0064–3133 (National Multifamily 

Housing Council and National Apartment 

Association); FTC–2023–0064–3152 (Building 

Owners & Managers Association et al.); FTC–2023– 

0064–3238 (Gibson, Dunn & Crutcher LLP); FTC– 

2023–0064–3263 (Flex Association); FTC–2023– 

0064–3294 (International Franchise Association). 

488 Motor Vehicle Mfrs. Ass’n v. State Farm Mut. 

Auto Ins., 463 U.S. 29, 43 (1983) (holding that an 

agency must articulate a satisfactory explanation for 

its action including a ‘‘rational connection between 

the facts found and the choices made.’’ (citing 

Burlington Truck Lines, Inc. v. United States, 371 

U.S. 156, 168 (1962))). 

489See, e.g., FTC–2023–0064–3294 (International 

Franchise Association); FTC–2023–0064–3133 

(National Multifamily Housing Council and 

National Apartment Association); FTC–2023–0064– 

3152 (Building Owners & Managers Association et 

al.); FTC–2023–0064–3263 (Flex Association). 

490See, e.g., FTC–2023–0064–3294 (International 

Franchise Association); FTC–2023–0064–3133 

(National Multifamily Housing Council and 

National Apartment Association); FTC–2023–0064– 

3152 (Building Owners & Managers Association et 

al.); FTC–2023–0064–3263 (Flex Association). 

491FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

492 Id. 

restrict the President’s at-will removal 

power with regard to inferior officers.475

In Collins v. Yellen, 594 U.S. 220 (2021), 

for example, the Court declined to 

‘‘revisit . . . prior decisions allowing 

certain limitations on the President’s 

removal power,’’ 476 which include the 

‘‘good cause’’ protections for inferior 

officers ‘‘with limited duties and no 

policymaking or administrative 

authority’’ described by the Court in 

Seila Law LLC v. CFPB, 591 U.S. 197 

(2020).477 In Free Enter. Fund, the Court 

held removal protections for Public 

Company Accounting Oversight Board 

members unconstitutional and 

contrasted the duties of those members 

with the lesser duties of administrative 

law judges: ‘‘[U]nlike members of the 

[Public Company Accounting Oversight] 

Board,’’ administrative law judges (1) 

‘‘perform adjudicative rather than 

enforcement or policy making 

functions,’’ or (2) ‘‘possess purely 

recommendatory powers.’’ 478 The 

FTC’s administrative law judges fit 

squarely within both of those 

descriptions. 

Even if the appointment procedures 

and removal protections of 

administrative law judges were 

unconstitutional because of their role as 

inferior officers under Article II, the 

constitutionality of the rule would not 

be in question because presiding officers 

under section 18 are not ‘‘officers’’ 

under Article II. Notably, while the 

presiding officer in the Informal Hearing 

for this rulemaking happened to be an 

administrative law judge, neither 

section 18(c)(1)(B) nor the Commission’s 

rules implementing that provision 

require an administrative law judge to 

preside over section 18 informal 

hearings.479

Instead, the presiding officer is a 

specific, temporary designation made 

under section 18(c) and its 

implementing rules, 16 CFR 1.11 

through 1.13. The Supreme Court’s 

framework for distinguishing between 

officers and employees asks whether an 

individual ‘‘exercise[s] significant 

authority pursuant to the laws of the 

United States’’ and occupies a position 

that is ‘‘continu[ous] and 

permanent.’’ 480 For presiding officers, 

neither is true. As relevant here, the role 

of the presiding officer in section 18 

rulemakings—assisting in the collection 

of necessary information for the 

rulemaking to proceed, ensuring 

hearings proceed methodically, and 

maintaining the rulemaking record 481— 

is not policymaking; that role is 

reserved for the Commission.482

Moreover, an administrative law judge, 

whether or not he or she is serving as 

a presiding officer, cannot initiate a 

rulemaking, decide its subject, decide 

whether a rule should issue, or establish 

its content. The Commission performs 

all of these functions.483

As an initial matter, the Commission 

determines whether an informal hearing 

will be conducted; presiding officers do 

not have discretion over whether the 

hearing will occur. The presiding officer 

simply ‘‘presides over the rulemaking 

proceedings’’ and, when appropriate, 

makes a ‘‘recommended decision based 

upon the findings and conclusions of 

such officer.’’ 484 The presiding officer’s 

powers in the conduct of the hearing are 

also limited. For example, the officer 

may not extend the time allotted for the 

informal hearing beyond a certain 

period ‘‘unless the Commission, upon a 

showing of good cause, extends the 

number of days for the hearing.’’ 485 The 

commenter is correct that the presiding 

officer is initially chosen by the ‘‘chief 

presiding officer,’’ who is the Chair of 

the FTC under 16 CFR 0.8. However, the 

formal assignment of that presiding 

officer to a particular hearing is in the 

initial notice of informal hearing, which 

is issued by vote of the Commission. 

Although the presiding officer reports to 

the chief presiding officer, again, the 

powers of the two together amount to no 

more than conducting the informal 

hearing and making a recommended 

decision based on the presiding officer’s 

findings to the Commission.486 All 

substantive decisions are made by the 

Commission. These are temporary 

assignments that begin and end with the 

informal hearing process. 

Accordingly, neither the 

Commission’s structure nor the role of 

the presiding officer in section 18 

violates the Constitution. 

E. Administrative Procedure Act 

Several commenters asserted the 

Commission has not complied with the 

APA.487 The Commission disagrees. The 

Commission complies with the APA’s 

requirements, including by explaining 

the rule’s relationship to the unfair and 

deceptive conduct the Commission 

seeks to prevent and by responding to 

all significant comments.488 As 

explained herein, the Commission also 

complies with the additional 

requirements of sections 18 and 22 of 

the FTC Act. 

Commenters claimed that the rule is 

arbitrary and capricious because it is not 

based on sufficient facts or data, and 

lacks a rational connection between the 

facts and the regulatory choices.489

These commenters argued that the 

factual record does not support the 

Commission’s decision to promulgate an 

industry-neutral rule or to apply the 

rule to particular industries.490 One 

commenter criticized various 

substantive aspects of the rule including 

its breadth, consideration of 

alternatives, and costs.491 The 

commenter also argued that the rule is 

duplicative and could lead to regulatory 

confusion.492

The Commission has carefully 

reviewed and considered the comments 

and information it received in this 

rulemaking. As a preliminary matter, 

the NPRM engaged in extensive 

discussion concerning the comments 

received in response to the ANPR and 

followed up with additional questions 

and requests for empirical data and 

proposed rule text. Likewise, the 

analysis contained throughout this SBP, 

particularly Parts III–VII, similarly 


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engages with and considers the 

additional significant comments and 

information received in response to the 

NPRM. Commenters raising questions 

regarding APA compliance primarily 

critiqued the industry-neutral nature of 

the proposal advanced in the NPRM. 

The Commission disagrees with these 

critiques. The Commission, however, 

has determined to limit this final rule to 

covered goods or services and need not 

address arguments regarding the 

application of the rule to a wide range 

of industries at this time. Further, both 

the NPRM and this SBP explain in 

detail the factual record and its 

relationship to the provisions finalized 

in the rule. While empirical data is not 

required, the Commission in section V 

presents an analysis for the final rule, 

identifying benefits, such as reductions 

in consumer search cost time and 

deadweight loss, and quantifying 

compliance costs. Finally, in section 

V.E.2.d, the Commission finds that the 

rule’s benefits to the public will exceed 

its costs. 

V. Final Regulatory Analysis Under 

Section 22 of the FTC Act 

Under section 22 of the FTC Act, 

when the Commission promulgates any 

final rule as a ‘‘rule’’ as defined in 

section 22(a)(1), it must include a ‘‘final 

regulatory analysis.’’ 15 U.S.C. 57b– 

3(b)(2). The final regulatory analysis 

must contain: (1) a concise statement of 

the need for, and objectives of, the final 

rule; (2) a description of any alternatives 

to the final rule that were considered by 

the Commission; (3) an explanation of 

the reasons for the Commission’s 

determination that the final rule will 

attain its objectives in a manner 

consistent with applicable law and the 

reasons the particular alternative was 

chosen; (4) an analysis of the projected 

benefits, any adverse economic effects, 

and any other effects of the final rule; 

and (5) a summary of any significant 

issues raised by the comments 

submitted during the public comment 

period in response to the Preliminary 

Regulatory Analysis, and the 

Commission’s assessment of such 

issues. 15 U.S.C. 57b–3(b)(2)(A) through 

(E). The Commission analyzes each of 

these components in the following final 

regulatory analysis. 

The Commission has the authority to 

promulgate this rule under section 18 of 

the FTC Act, 15 U.S.C. 57a, which 

authorizes the Commission to 

promulgate, modify, and repeal trade 

regulation rules that define with 

specificity acts or practices in or 

affecting commerce that are unfair or 

deceptive within the meaning of section 

5(a)(1) of the FTC Act, 15 U.S.C. 

45(a)(1). In explaining the need for, and 

objectives of, the rule, the Commission 

observes that a clear rule is the best way 

to accomplish its goals of: (1) ensuring 

that consumers receive truthful, timely, 

and transparent information about price 

to permit them to comparison shop 

effectively and (2) leveling the playing 

field for honest competitors. In addition, 

a clear rule would deter the defined 

unfair or deceptive pricing practices by 

enabling the Commission to more 

readily obtain monetary relief and civil 

penalties. The Commission carefully 

considered several alternatives to the 

rule, including terminating the 

rulemaking and pursuing a broader, 

industry-neutral alternative. The 

Commission determined that the 

alternative of terminating the 

rulemaking would not accomplish these 

objectives. As explained in section II, 

the Commission finds that bait-andswitch pricing and misleading fees and 

charges are prevalent economy-wide, 

but chooses to begin by tackling these 

practices in the live-event ticketing and 

short-term lodging industries, where the 

Commission first began evaluating drip 

pricing more than a decade ago and 

which have a long history of harming 

consumers and businesses. The final 

rule will attain its objectives of 

promoting truthful, timely, and 

transparent pricing, comparison 

shopping, and fair competition in the 

live-event ticketing and short-term 

lodging industries in a manner 

consistent with applicable law. The 

Commission will rely on its existing 

section 5 authority in pursuing case-bycase enforcement actions against 

businesses in other industries that 

engage in the specific unfair and 

deceptive pricing practices that are the 

subject of the industry-specific coverage 

in this rule. 

The Commission’s final regulatory 

analysis indicates that adoption of the 

rule will result in benefits to the public 

that exceed the costs. As described 

further herein, the rule will not only 

result in significant benefits to 

consumers but also improve the 

competitive environment in the liveevent ticketing and short-term lodging 

industries, particularly for small, 

independent, or new firms. One such 

benefit is that the final rule will reduce 

deadweight loss. ‘‘Deadweight loss’’ is a 

term used to describe the loss of 

efficiency or economic welfare, a cost to 

society, that occurs when resources are 

not used as efficiently as possible. At a 

competitive equilibrium, in which the 

marginal benefit for consumers equals 

the marginal cost for firms, there is no 

deadweight loss. When firms, including 

those in the live-event ticketing and 

short-term lodging industries, engage in 

bait-and-switch tactics, consumers 

purchase more goods and services than 

they would otherwise because they do 

not understand the full price. In other 

words, in such cases, consumers 

overconsume beyond the quantity 

necessary for competitive equilibrium. 

This overconsumption is a deadweight 

loss because, if they had full 

information, consumers would shift 

their spending toward more beneficial 

and efficient spending patterns that 

reflect their true preferences. 

Deadweight loss is discussed more fully 

in section V.E.2.a.ii. 

The rule provides a net benefit to 

society if its benefits exceed its costs. 

The Commission quantifies the 

incremental benefits for the live-event 

ticketing and short-term lodging 

industries and shows that the rule’s 

benefits exceed the costs in these 

industries. 

The Commission reviewed the 

comments relating to its Preliminary 

Regulatory Analysis, some of which 

challenged the Commission’s estimation 

of the rule’s potential costs and benefits. 

In response to these comments, the 

Commission herein clarifies its analysis 

and adds a sensitivity analysis to the 

baseline estimation. The Commission 

concludes that these comments do not 

affect the Commission’s finding that the 

potential benefits of the rule exceed the 

potential costs. 

A. Concise Statement of the Need for, 

and Objectives of, the Final Rule 

The Commission believes the final 

rule is needed to ensure that consumers 

receive truthful, timely, and transparent 

information about the total price of 

goods or services, including the nature, 

purpose, and amount of any fees or 

charges imposed on the transaction, so 

that they can effectively comparison 

shop and budget their spending dollars 

when deciding what live-event tickets to 

purchase or where to stay when 

traveling. Although bait-and-switch 

pricing and misleading fees are already 

unlawful unfair or deceptive acts or 

practices under section 5 of the FTC 

Act, the Commission concludes that a 

clear rule is the best way to accomplish 

its goal of preventing the rule’s defined, 

specific unfair and deceptive pricing 

practices in the live-event ticketing and 

short-term lodging industries while 

fostering a level playing field for honest 

competitors to be able to compete 

truthfully and fairly based on price. In 

addition, the final rule aims to increase 

deterrence of the defined unfair or 

deceptive pricing practices in these 

industries by enabling the Commission 


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493 15 U.S.C. 53(b). 

494See NPRM, 88 FR 77436–38, nn.122, 211, 232 

(discussing AMG). 

495See 15 U.S.C. 57b(a)(2) (‘‘If the Commission 

satisfies the court that the act or practice to which 

the cease and desist order relates is one which a 

reasonable man would have known under the 

circumstances was dishonest or fraudulent, the 

court may grant relief under subsection (b) of this 

section.’’). 

496Certain statutes, such as the Restore Online 

Shoppers’ Confidence Act, 15 U.S.C. 8401 through 

8405, include provisions that treat violations of the 

statute as a violation of a rule for purposes of 

section 19(a)(1). See, e.g., 15 U.S.C. 8404(a). 

to more readily obtain redress for injury 

to consumers through section 19(a)(1) of 

the FTC Act, 15 U.S.C. 57b(a)(1), and by 

allowing courts to impose civil penalties 

where appropriate. The Commission 

believes that the rule will accomplish 

these goals without significantly 

burdening businesses and will provide 

significant benefits to consumers and 

honest competitors. 

The record of this rulemaking is 

replete with comments from consumers, 

consumer groups, industry members, 

academics, and policy organizations, as 

well as officials and agencies across all 

levels of government, emphasizing the 

importance of consumers’ ability to 

effectively comparison shop and 

businesses’ ability to honestly compete 

against each other based on price. 

Regardless of industry, consumers want 

to comparison shop when deciding 

where to purchase their goods or 

services from among various competing 

offers. In many instances, consumers 

have found it increasingly difficult, if 

not impossible, to effectively 

comparison shop because businesses 

fail to provide the total price when they 

display a purported amount a consumer 

will pay for a good or service. 

Consumers are also misled as to the 

nature, purpose, amount, and 

refundability of fees and charges, and 

are unable to make informed choices 

about the value of the fee or charge, or 

the good or service it represents, 

because their understanding of the fee 

or charge is predicated on deceptive 

omissions or false or misleading 

information. As a result, consumers are 

harmed because they consume more 

goods or services, pay more for a good 

or service, and incur higher search costs 

than they otherwise would have if they 

had been presented with the total price 

upfront and truthful, timely, and 

transparent information regarding fees 

and charges. Businesses that honestly 

present the total price of a good or 

service and accurately disclose the 

nature, purpose, and amount of fees and 

charges are at a competitive 

disadvantage to those that mislead 

consumers by presenting purportedly 

lower prices and inaccurate information 

about fees and charges. As explained in 

section II, the record, as well as the 

Commission’s law enforcement actions, 

outreach, and other engagement with 

businesses and consumers, support a 

finding that these practices pervade the 

economy across industries. 

Fundamentally, the rule will help 

consumers make informed decisions 

when comparison shopping and level 

the playing field for honest businesses 

in the live-event ticketing and shortterm lodging industries, two industries 

that have a long history of bait-andswitch pricing and misrepresentations 

regarding fees and charges. 

In addition, the final rule is necessary 

to allow the Commission to recover 

redress more efficiently in cases where 

there is quantifiable consumer harm 

resulting from bait-and-switch pricing 

and misleading fees and charges. The 

final rule will also deter live-event 

ticketing and short-term lodging 

businesses from engaging in these 

practices by allowing for the imposition 

of monetary relief in the form of 

consumer redress and civil penalties. 

In 2021, the Supreme Court in AMG 

Capital Mgmt., LLC v. FTC, 593 U.S. 67, 

82 (2021), held that section 13(b) of the 

FTC Act 493 did not authorize the 

Commission to seek, or a court to order, 

equitable monetary relief for consumers 

such as restitution or disgorgement. The 

AMG ruling has made it significantly 

more difficult for the Commission to 

return money to injured consumers, 

particularly in cases that do not involve 

rule violations.494

Since AMG, the primary means for the 

Commission to return money 

unlawfully taken from consumers has 

been through section 19 of the FTC Act, 

15 U.S.C. 57b, which provides two 

paths for consumer redress. One path, 

under section 19(a)(2), typically requires 

the Commission to first conduct an 

administrative proceeding to determine 

whether the respondent violated the 

FTC Act; if the Commission finds that 

the respondent did so, the Commission 

can issue a cease-and-desist order, 

which might not become final until after 

the resolution of any appeals. To obtain 

monetary relief, the Commission then 

must initiate a separate action in 

Federal court under section 19 and, in 

that action, the Commission must prove 

that the violator in the administrative 

action engaged in objectively fraudulent 

or dishonest conduct.495

The more efficient path to monetary 

relief is under section 19(a)(1), which 

allows the Commission to recover 

redress in a single Federal court action 

for violations of a Commission rule 

relating to unfair or deceptive acts or 

practices.496 Under the rule, the 

Commission will now be able to use the 

section 19(a)(1) pathway to obtain 

redress for losses attributable to the 

specific unfair or deceptive practices the 

rule defines and prohibits. 

In addition, the final rule will allow 

courts to impose civil penalties under 

section 5(m)(1)(A) of the FTC Act, 15 

U.S.C. 45(m)(1)(A). Civil penalties will 

provide the deterrence necessary to 

incentivize compliance with the law, 

even in cases when it is difficult to 

quantify consumer harm. 

Overall, the rule’s prohibition of baitand-switch pricing tactics, including 

drip pricing, and misleading fees in the 

live-event ticketing and short-term 

lodging industries expands the 

Commission’s enforcement toolkit and 

allows it to deliver on its consumer 

protection mission by stopping and 

deterring harmful conduct in these 

industries and making consumers whole 

when they have been harmed. The 

unfair or deceptive acts or practices 

involving bait-and-switch pricing and 

misleading fees encompassed by this 

final rule are prevalent and harmful to 

consumers and honest competitors. 

Thus, the unlocking of additional 

remedies through this rulemaking— 

particularly, the ability to obtain redress 

for consumers injured by misconduct 

and civil penalties against violators, 

where appropriate—will allow the 

Commission to more effectively police 

and deter unfair or deceptive pricing 

practices in these industries. 

B. Alternatives to the Final Rule the 

Commission Considered, Reasons for 

the Commission’s Determination That 

the Final Rule Will Attain Its Objectives 

in a Manner Consistent With Applicable 

Law, and the Reasons the Particular 

Alternative Was Chosen 

In analyzing the potential costs and 

benefits of the proposed rule, the 

Commission considered several 

alternatives, including terminating the 

rulemaking and a broader rule 

alternative. As the Commission 

observed in the NPRM, one potential 

alternative is to terminate the 

rulemaking and rely instead on the 

Commission’s existing tools to combat 

unfair or deceptive practices relating to 

pricing, such as consumer education 

and enforcement actions brought under 

sections 5 and 19(a)(2) of the FTC Act. 

However, terminating the rulemaking 

would deprive consumers of live-event 

tickets and short-term lodging of 

quantifiable time savings, and 

unquantifiable benefits including 

reduced frustration, less consumer 


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497FTC–2023–0064–3302 (Public Citizen). 498 Id. 

stress, and improved economic 

efficiency through a reduction of 

deadweight loss, as outlined in section 

V. Implementation of the rule also 

strengthens the Commission’s 

enforcement program against unfair or 

deceptive pricing practices in the liveevent ticketing and short-term lodging 

industries. 

As noted in the NPRM, given the 

strong indicators that bait-and-switch 

pricing, including drip pricing, and 

misleading fees and charges are 

prevalent and worsening across 

industries, the Commission considered 

adopting a final rule that would have 

applied to all industries nationwide. 

The Commission declines to adopt such 

an industry-neutral rule at this time and 

instead chooses, in its discretion, to use 

its rulemaking authority incrementally. 

The Commission’s rule first targets the 

two industries where the Commission 

first began evaluating drip pricing more 

than a decade ago and where consumer 

harm has been longstanding and 

continues to be pronounced. As noted 

in section II, most transactions in the 

live-event ticketing and short-term 

lodging industries occur online, where 

bait-and-switch pricing and misleading 

fees and charges have the highest 

potential to thwart the rule’s stated 

objectives, namely price transparency 

and timeliness, as well as comparison 

shopping. In addition, consumers are 

often presented with identical offers (as 

is the case with live-event ticketing) or 

near-identical offers (as is the case with 

short-term lodging), and as such, price 

is the most salient feature for consumers 

in these transactions. 

The NPRM also discussed, and the 

Commission also considered, a small 

business exemption. Small businesses, 

which may have smaller profit margins, 

may be disproportionately affected by 

initial compliance costs associated with 

§ 464.2’s disclosure requirements. On 

the other hand, a rule exempting small 

businesses would fail to accomplish the 

rule’s core objectives of transparency in 

pricing and facilitating comparison 

shopping because consumers would 

continue to be subject to a mix of 

pricing disclosures in the live-event 

ticketing and short-term lodging 

industries that could include bait-andswitch pricing and misleading fees. As 

one commenter noted, ‘‘Small 

businesses will benefit from the rule 

because it eliminates the deceptive 

practices that keep consumers from 

being able to comparison shop.’’ 497 The 

commenter also stated that a small 

business ‘‘exception will undermine the 

ability of consumers to make purchasing 

decisions based on transparent and 

honest information.’’ 498 A small 

business exemption could also reduce 

consumer benefits arising from 

increased price transparency across 

markets and lower consumer confidence 

regarding whether the rule applies to 

specific purchases. 

Excluding small businesses could also 

harm honest competition because such 

an exemption might impose more 

uncertainty and compliance costs for 

businesses to determine whether the 

rule applies to them. In addition, as 

noted in section III, some industry 

commenters favored a rule that applied 

equally to all industry members, to 

facilitate comparison shopping and 

avoid the creation of competitive 

advantages. 

Some commenters, as noted in section 

III, expressed frustration with fees or 

charges they described as ‘‘excessive’’ or 

‘‘worthless.’’ As discussed in the NPRM, 

an alternative to the final rule could be 

to explicitly prohibit excessive or 

worthless fees or charges in the liveevent ticketing and short-term lodging 

industries. This alternative may benefit 

consumers who pay excessive amounts 

for goods or services in these industries 

or for fees or charges that provide them 

little to no value, allowing them instead 

to save their money or spend it 

elsewhere. 

The Commission declines to adopt an 

alternative rule prohibiting worthless or 

excessive fees or charges, because doing 

so may raise additional questions for 

these industries and for the Commission 

regarding how to assess the value of fees 

or charges. In addition, the final rule 

may already accomplish some of the 

benefits of such an alternative. For 

example, the final rule requires total 

price to include all mandatory fees or 

charges (with limited exceptions for 

government charges and shipping 

charges). Transparency and competition 

on price could then disincentivize liveevent ticketing and short-term lodging 

businesses from incorporating such fees 

into their pricing schemes altogether. In 

addition, consumer confusion related to 

the purpose or value of fees or charges 

would be addressed by the final rule’s 

requirement to disclose the nature, 

purpose, and amount of any fees or 

charges lawfully excluded from total 

price, as well as the prohibition against 

misrepresenting any fees or charges. 

In sum, the rule accomplishes the 

Commission’s objectives in the areas of 

live-event ticketing and short-term 

lodging consistent with applicable law, 

while providing the Commission 

additional time to consider further 

action. As explained in section V.E, the 

Commission believes the rule’s benefits 

exceed the costs of the rule. Notably, the 

Commission believes, as detailed in 

Parts II, III, and V, that the rule also will 

result in additional tangible benefits 

from consumers’ ability to accurately 

comparison shop for live-event tickets 

and short-term lodging. Therefore, the 

Commission finds in this final 

regulatory analysis that adoption of the 

rule will result in benefits to the public 

that exceed the costs. 

C. The NPRM’s Preliminary Regulatory 

Analysis 

In the Economic Analysis of Costs and 

Benefits of the Proposed Rule in section 

VII.C of the NPRM (hereafter, 

‘‘Preliminary Regulatory Analysis’’), the 

Commission described the anticipated 

effects of the proposed rule and 

quantified the expected benefits and 

costs to the extent possible. For each 

benefit or cost quantified, the analysis 

identified the data sources relied upon 

and, where relevant, the quantitative 

assumptions made. The Preliminary 

Regulatory Analysis measured the 

benefits and costs of the proposed rule 

against a baseline in which the 

Commission did not promulgate a rule 

addressing the unfair or deceptive 

practices of presenting incomplete or 

inaccurate pricing information that 

obscures total price and misrepresenting 

the nature and purpose of fees. Several 

of the benefits and costs were 

quantifiable for specific industries, but 

the Commission found that benefits at 

the economy-wide level were not 

quantifiable. The Preliminary 

Regulatory Analysis discussed the bases 

for uncertainty in the estimates. 

In the Preliminary Regulatory 

Analysis, the Commission performed a 

break-even analysis under various 

assumptions to determine the required 

benefits necessary to justify the 

estimated costs. Under the assumptions 

of high-end compliance costs and a 7% 

discount rate, the Commission found 

that if the average benefit to consumers 

from the proposed rule exceeded $6.65 

per year over ten years, then the 

proposed rule’s benefits would exceed 

its quantified economy-wide 

compliance costs. The expected benefit 

could be a result of reduced consumer 

search time, of increased consumer 

surplus from more efficient purchasing 

decisions, or a combination of the two. 

The Commission found in the 

Preliminary Regulatory Analysis that if 

the proposed rule resulted in savings 

from reduced search time that exceeded 

15.82 minutes per consumer per year 

over ten years, then the benefits from 

reduced search time alone would 


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499FTC–2023–0064–2856 (National Football 

League); FTC–2023–0064–3127 (U.S. Chamber of 

Commerce); FTC–2023–0064–3238 (Gibson, Dunn, 

& Crutcher LLP); FTC–2023–0064–3122 (Vivid 

Seats); FTC–2023–0064–3094 (American Hotel & 

Lodging Association); FTC–2023–0064–3292 

(National Association of Theatre Owners); FTC– 

2023–0064–3293 (Travel Technology Association); 

FTC–2023–0064–3294 (International Franchise 

Association). 

500FTC–2023–0064–3263 (Flex Association); 

FTC–2023–0064–3300 (National Restaurant 

Association); FTC–2023–0064–3217 (Bowling 

Proprietors’ Association of America); FTC–2023– 

0064–3233 (NCTA—The internet & Television 

Association). 

501FTC–2023–0064–3122 (Vivid Seats). 

502FTC–2023–0064–3212 (TickPick, LLC). 

503FTC–2023–0064–3300 (National Restaurant 

Association). 

504See, e.g., id. (National Restaurant Association 

commented that there are ‘‘common supply chain 

issues that may cause certain food items to increase 

or decrease in price’’ and ‘‘thousands of restaurants 

. . . offer varying seasonal menus with completely 

different offerings’’); FTC–2023–0064–2992 

(Individual Commenter who owns a restaurant 

commented that complying with the rule would not 

be complex for restaurants because ‘‘[t]hey reprice 

and change dishes frequently’’); FTC–2023–0064– 

3219 (Georgia Restaurant Association also referred 

to ‘‘rising food costs [and] supply chain 

disruptions’’); FTC–2023–0064–3180 (Independent 

Restaurant Coalition commented about ‘‘increasing 

food costs’’); FTC–2023–0064–3078 (Washington 

Hospitality Association referred to supply chain 

issues, inflation, and other rising costs). 

505U.S. Small Bus. Admin., Office of Advocacy, 

Re: Trade Regulation Rule on Unfair or Deceptive 

Fees FTC–2023–0064–0001, https://

advocacy.sba.gov/wp-content/uploads/2024/03/ 

Comment-Letter-Trade-Regulation-Rule-on-Unfairor-Deceptive-Fees.pdf. 

506See, e.g., id.; FTC–2023–0064–3127 (U.S. 

Chamber of Commerce). 

507FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

exceed quantified compliance costs 

under the assumption of high-end costs 

and a 7% discount rate. 

D. Significant Issues Raised by 

Comments, the Commission’s 

Assessment and Response, and Any 

Changes Made as a Result 

In this section, the Commission 

summarizes its assessment of, and 

response to, the major concerns, 

comments, and suggestions raised by 

commenters about the Preliminary 

Regulatory Analysis. The Commission 

received comments about the 

Preliminary Regulatory Analysis from 

industry groups, law firms, consumer 

advocacy groups, think tanks, 

consumers, and business owners. 

Section V.D.1 addresses comments 

about the Commission’s cost estimates, 

section V.D.2 addresses comments about 

the Commission’s the benefits estimates, 

and section V.D.3 addresses comments 

specific to the economy-wide breakeven analysis. 

1. Comments on Costs 

In section V.D.1.a through d, the 

Commission addresses four major 

comments regarding the NPRM’s cost 

estimates: (a) the estimated costs are too 

low; (b) there are unquantified costs to 

firms; (c) there are unquantified costs to 

consumers; and (d) there are 

unquantified costs to third parties. 

Section V.D.1.e addresses commenter 

concerns about costs that may stem from 

applying the rule to variable, dynamic, 

or contingent fees. 

(a) Public Comments: Estimated Costs 

Are Too Low 

Commenters from members and 

representatives of the live-event 

ticketing and short-term lodging 

industries, among others, argued that 

estimated costs in the NPRM were too 

low because the analysis 

underestimated the number of attorney, 

data scientist, and web developer hours 

needed to comply with the proposed 

rule.499 These commenters contended 

that some businesses will require more 

time than the assumed average estimates 

of labor hours used in the Preliminary 

Regulatory Analysis. The Commission 

acknowledges the possibility that some 

businesses will incur a greater number 

of hours to comply with the final rule, 

but notes that this is consistent with the 

Preliminary Regulatory Analysis 

because the employee hour estimates 

used represent averages. These 

estimates capture the fact that some 

businesses will require more time than 

the average and some will require less. 

The Commission received additional 

comments with similar concerns about 

the Commission’s compliance hours 

estimates as they apply to other specific 

industries such as movie theater 

ticketing, delivery apps, restaurants, 

bowling, and cable and broadband, 

which are no longer subject to the final 

rule.500 However, the Commission’s 

argument that the compliance hours 

represent averages holds more broadly. 

Two commenters in the live-event 

ticketing industry provided alternative 

estimates of average employee hours 

necessary to comply with the rule. Vivid 

Seats stated that, from its experience 

implementing upfront pricing as a ticket 

seller in three states, the Commission 

underestimated the employee hours 

needed for live-event ticket sellers by at 

least a factor of five.501 Conversely, 

another live-event ticket seller, 

TickPick, commented that, for the most 

part, live-event ticketing companies 

would incur an immaterial cost to 

implement all-in pricing because ‘‘the 

technology already exists within 

ticketing platforms to eliminate drip 

pricing and would simply need to be 

applied to events in the U.S.’’ 502 Again, 

the Commission notes that the estimated 

employee hours reflect an average and, 

as these commenters stated, it is 

possible that firms like Vivid Seats may 

require more hours, while others, like 

TickPick, may require fewer. 

The National Restaurant Association 

stated that it would take restaurants at 

least twenty hours a year to reoptimize 

menu prices because the Commission’s 

estimates did not account for supply 

chain issues that may change prices or 

consider that some restaurants may offer 

seasonal menus.503 The Preliminary 

Regulatory Analysis omitted these costs 

because they are not a result of the rule; 

restaurants will face supply chain 

fluctuations and seasonal changes to 

their menus regardless of the rule.504

However, this is no longer a concern in 

the final rule, which does not apply to 

restaurants. 

The Office of Advocacy of the United 

States Small Business Administration 

(‘‘SBA Office of Advocacy’’) argued that 

costs estimated in the Preliminary 

Regulatory Analysis are too low because 

data scientist and web developer hours 

should be ongoing costs, rather than 

one-time costs.505 It argued that ‘‘the 

FTC should assume a percentage of 

firms that in the previous year were in 

compliance will not be the following 

year.’’ The Commission does not believe 

that these ongoing costs are attributable 

to the rule. Once firms have adjusted to 

the rule, making sure new pricing 

strategies comply with the rule is 

considered a part of the normal course 

of business, as is ensuring compliance 

with other existing laws and 

regulations. 

Some commenters identified 

purported costs that were either already 

captured in the economic analysis or 

would not be affected by the rule. The 

U.S. Chamber of Commerce and SBA 

Office of Advocacy argued that the 

Preliminary Regulatory Analysis did not 

account for the time needed to train staff 

to provide new upfront prices to 

customers for in-person, online, and 

phone sales.506 The Commission 

believes training time, to the extent that 

it exists, is already captured in the 

assumed range of data scientist and web 

developer hours, which the Commission 

has noted serves as a proxy for any ruleassociated costs from adjusting pricing 

strategies and displaying prices to 

consumers. Another commenter argued 

that businesses would need to ‘‘hire 

graphic designers to make 

advertisements look appealing and web 

designers or software engineers to 

rebuild entire websites.’’ 507 In addition, 

it argued that the Preliminary 

Regulatory Analysis did not account for 


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508 Id.; U.S. Small Bus. Admin., Office of 

Advocacy, Re: Trade Regulation Rule on Unfair or 

Deceptive Fees FTC–2023–0064–0001, https://

advocacy.sba.gov/wp-content/uploads/2024/03/ 

Comment-Letter-Trade-Regulation-Rule-on-Unfairor-Deceptive-Fees.pdf. 

509FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

510FTC–2023–0064–3300 (National Restaurant 

Association); FTC–2023–0064–3202 (TechNet). 

511FTC–2023–0064–2891 (Mary Sullivan, George 

Washington University, Regulatory Studies Center). 

512FTC–2023–0064–2856 (National Football 

League); FTC–2023–0064–2887 (Progressive Policy 

Institute); FTC–2023–0064–3122 (Vivid Seats); 

FTC–2023–0064–3127 (U.S. Chamber of 

Commerce); FTC–2023–0064–3133 (National 

Multifamily Housing Council and National 

Apartment Association); FTC–2023–0064–3143 

(ACA Connects—America’s Communications 

Association); FTC–2023–0064–3233 (NCTA—The 

internet & Television Association); FTC–2023– 

0064–3238 (Gibson, Dunn & Crutcher LLP); FTC– 

2023–0064–3258 (National Taxpayers Union 

Foundation). 

513FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

514FTC–2023–0064–2884 (NTCA—The Rural 

Broadband Association); FTC–2023–0064–3143 

(ACA Connects—America’s Communications 

Association); FTC–2023–0064–3233 (NCTA—The 

Continued 

costs needed to replace physical ads, 

subway ads, and billboards and 

speculated that would take ‘‘thousands 

of hours.’’ The final rule has no bearing 

on a firm’s decision to engage graphic 

designers to ensure its advertisements 

are ‘‘appealing,’’ and the Commission 

does not believe—and commenters have 

failed to cite evidence demonstrating— 

that the need to update prices will 

require rebuilding entire websites. 

Moreover, as discussed in more detail in 

section V.E.3.a, the estimated range of 

web developer time is a proxy for any 

costs associated with changing price 

displays to comply with the rule. 

Two commenters argued that the 

Preliminary Regulatory Analysis 

underestimated costs because the wage 

rates for attorneys and data scientists 

were too low and were not the same as, 

for example, attorneys fees.508 One 

commenter stated that the estimated 

wages did not account for overhead 

costs or reflect the higher costs of hiring 

outside counsel and data scientists and 

suggested using $306 in attorney wages 

and $59 in data scientist wages to reflect 

these higher costs.509 In response to 

these suggestions, the Commission 

conducted a sensitivity analysis that 

multiplied wage rates by two to reflect 

overhead and hiring costs for the shortterm lodging and live-event ticket 

industries. The results of the sensitivity 

analysis are provided in section 

V.E.3.b.i and do not impact the 

Commission’s assessment that the 

benefits exceed the costs. The 

Commission received two additional 

comments with similar concerns about 

the Commission’s wage estimates as 

they apply to the restaurant industry 

and the innovation economy, which are 

no longer subject to the final rule.510

(b) Public Comments: Unquantified 

Costs to Firms 

The NPRM noted that there are 

unquantified costs of the rule, primarily 

in the form of unintended consequences 

to consumers as they adjust to upfront 

pricing. In addition, commenters 

identified additional types of 

unquantified costs to firms. 

An academic commenter argued that 

there may be unintended consequences 

to firms from partial compliance.511 The 

commenter stated that no firm would 

want to be the first in its market to 

comply, and the resulting ‘‘partial or 

uneven compliance would cause 

compliant firms to lose business to firms 

that ignored the rule. Implementing 

coordinated compliance for the entire 

economy would be difficult with the 

[Commission’s] limited resources.’’ The 

Commission believes that the partial 

compliance described by this 

commenter is the current status quo in 

the absence of a rule. Currently, some 

firms impose drip pricing, and these 

firms may have a competitive advantage 

over those that do not impose drip 

pricing. Under the rule, the Commission 

expects all firms in the short-term 

lodging and live-event ticket industries 

to provide total price, which is an 

improvement relative to the status quo. 

If, as the commenter argues, some 

degree of partial compliance remains, 

the potential competitive advantage 

from non-compliance would be similar 

to the status quo, with the additional 

risk to non-compliant firms of law 

enforcement actions with potential 

exposure to consumer redress and 

penalties. In other words, even with 

some degree of partial compliance after 

the final rule, such an equilibrium 

would still result in more benefits for 

consumers than a world without the 

final rule. The commenter’s concern 

that implementing coordinated 

compliance for the whole economy may 

be difficult is mitigated in the final rule, 

which only applies to two industries. In 

addition, while the Commission may 

have limited enforcement resources, it 

expects consumer behavior regarding 

fees to adjust over time due to the final 

rule. Once upfront pricing becomes the 

new norm, consumers will expect to see 

total prices displayed upfront and will 

be more likely to punish firms that 

ignore the rule by taking their business 

elsewhere. Therefore, any partial 

compliance is likely to be temporary. 

Nine commenters stated the NPRM’s 

assertion that the rule will provide a 

harmonized legal framework for all 

States is incorrect because, as discussed 

in section III, the rule only preempts 

State laws if they are inconsistent with 

the rule.512 Commenters noted that an 

added layer of regulation is an 

additional cost for businesses as they 

determine whether they are compliant 

with the various rules to which they are 

subject. The Commission updates the 

final regulatory analysis to reflect this 

concern as it applies to covered goods 

or services, but notes that the cost was 

already captured by the assumption that 

all firms within the live-event ticketing 

and short-term lodging industries will 

spend on average one hour to determine 

whether the rule applies to them. 

One commenter asserted that ‘‘[t]he 

Commission erroneously disclaims the 

possibility of losses to producer 

surplus.’’ 513 The commenter argued that 

the Commission’s statement that 

consumer surplus is reduced due to 

consumer search costs under drip 

pricing ignores the countervailing 

increase of producer surplus. The 

commenter further contended that the 

Preliminary Regulatory Analysis omits 

that, under drip pricing, consumers 

purchase more expensive products, 

which amounts, in part, to a transfer of 

surplus from consumers to sellers. The 

Commission acknowledges the transfer 

of surplus due to higher prices. 

However, the commenter incorrectly 

assumes that the movement of surplus 

from consumers to producers will be a 

one-to-one transfer and presupposes 

that there will be no increase in 

consumer search time or deadweight 

loss. As is discussed in section V.E.2.a.i, 

the increased, unnecessary consumer 

search time due to drip pricing results 

in a net cost to society—no one benefits 

from the additional hours consumers 

collectively spend searching for price 

information and then being surprised 

with a higher final amount at the time 

of purchase. In addition, as is discussed 

in section V.E.2.a.ii, inefficient 

overconsumption under drip pricing 

generates a deadweight loss. 

Inefficiently high spending under drip 

pricing thus results in a cost to society 

in the form of higher search costs and 

a deadweight loss in addition to a 

transfer of surplus from consumers to 

sellers in the form of higher seller 

revenue. Overall, this results in a net 

loss to society. 

Lastly, some commenters representing 

the communications services industry 

noted that there are unquantified costs 

to cable, broadband, and wireless 

providers due to similar upfront pricing 

requirements from the FCC.514 The 


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internet & Television Association); FTC–2023– 

0064–3234 (CTIA—The Wireless Association). 

515FTC–2023–0064–3127 (U.S. Chamber of 

Commerce). 

516FTC–2023–0064–3143 (ACA Connects— 

America’s Communication Association; FTC–2023– 

0064–3296 (Bay Area Apartment Association). 

517FTC–2023–0064–3127 (U.S. Chamber of 

Commerce); FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

518FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

519FTC–2023–0064–3293 (Travel Technology 

Association). 

520FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

521Tom Blake et al., Price Salience and Product 

Choice, 40 Mktg. Sci. 619 (2021), https://doi.org/ 

10.1287/mksc.2020.1261; Michael R. Baye et al., 

Search Costs, Hassle Costs, and Drip Pricing: 

Equilibria with Rational Consumers and Firms 

(Nash-Equilibrium.com Working Paper, 2019), 

http://nash-equilibrium.com/PDFs/Drip.pdf; 

Alexander Rasch et al., Drip Pricing and its 

Regulation: Experimental Evidence, 176 J. Econ. 

Behav. & Org. 353 (2020), https://doi.org/10.1016/ 

j.jebo.2020.04.007. 

522FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP, discussing Blake, supra note 521). 

Commission’s decision to narrow the 

final rule to covered goods or services 

renders these comments inapplicable. 

(c) Public Comments: Unquantified 

Costs to Consumers 

The NPRM noted that there may be 

unquantified costs of the rule in the 

form of consumer confusion as 

consumers adjust to upfront pricing. 

Commenters argued there were several 

additional unquantified costs to 

consumers. One commenter suggested 

that consumers would experience 

higher search time if companies limit or 

eliminate price advertising to avoid the 

regulatory risk of providing an 

inaccurate total price.515 The 

Commission reiterates that the rule does 

not require firms to eliminate price 

advertising; rather the rule requires 

covered firms to present total price to 

consumers whenever businesses offer, 

display, or advertise any price of a 

covered good or service. The 

Commission believes that unnecessarily 

high consumer search time and 

anticompetitive effects resulting from 

different pricing strategies are already a 

problem absent the rule, where firms 

advertise a mix of dripped prices, 

upfront prices, and no prices. The 

commenter did not provide evidence for 

why, under the rule, some firms are, or 

would be, unable to advertise total price 

or why it would result in higher search 

time and a less competitive equilibrium 

than the status quo. The Commission 

received two additional comments with 

similar concerns as they apply to the 

telecommunications and rental housing 

industries, which are no longer subject 

to the final rule.516

Two commenters also suggested there 

might be potentially higher consumer 

search time if businesses unbundle 

previously bundled options in an effort 

to reduce the advertised price in 

response to the rule, stating that hotels, 

for example, may make amenities such 

as wi-fi, gym access, and parking payper-use.517 The Commission 

acknowledges that some businesses may 

unbundle previously bundled options 

but reiterates that the rule prohibits 

businesses from treating features as 

optional if they are necessary to render 

the good or service fit for its intended 

use. The Commission also notes that 

consumers are likely to punish firms 

that unbundle features that they expect 

to be included in total price by taking 

their business elsewhere. A commenter 

also speculated that there may be an 

increase in deadweight loss if 

businesses set inefficiently high prices 

as they reoptimize prices or seek to cut 

costs by reducing the quality of goods 

and services.518 The Commission 

believes this is unlikely. Under the rule, 

there will be competitive pressure to 

adjust both price and product quality to 

more efficient levels when firms must 

present total price. As discussed in 

section V.E.1.b, drip pricing sometimes 

leads consumers to underestimate the 

total price of a good or service. The 

result is that consumers start 

transactions not understanding that the 

final amount of payment will be higher 

than what they are willing or able to 

pay. For example, consumers may book 

premium seats to a concert believing 

they could afford the purchase, only to 

realize afterward that the total price was 

understated. Had they understood the 

final amount of payment, they would 

have selected seats at a lower price 

point or skipped the concert altogether. 

The final rule will help ensure that 

consumers’ preferences, both in terms of 

cost and quality, can be realized. 

One industry group argued that 

because intermediary travel websites 

rely on short-term lodging firms for 

accurate price information, the 

proposed rule may incentivize these 

firms to charge intermediaries a 

premium for accurate pricing 

information, ‘‘knowing that the 

intermediaries face significant 

regulatory risk without access to such 

information.’’ 519 The commenter 

suggested that these additional costs 

could be passed onto consumers 

without adding any value. As explained 

in section III, the Commission reiterates 

that the rule requires businesses that 

sell or advertise through intermediaries 

to provide the intermediaries with 

accurate pricing information (including 

about mandatory and optional fees). The 

rule’s coverage of business-to-business 

transactions protects consumers when 

they purchase goods or services, the 

sellers that do business with 

intermediaries, and the intermediaries 

themselves. The Commission further 

notes that hotels are already free to 

charge travel websites and 

intermediaries money in exchange for 

pricing information, yet they do not 

because these travel websites and 

intermediaries allow the hotels to reach 

more consumers. In addition, under the 

status quo, intermediaries already 

contend with different fee practices 

across short-term lodging firms and are 

required to ensure they consistently 

disclose pricing information to 

consumers; the final rule should obviate 

the need for intermediaries to deal with 

inconsistent fee practices moving 

forward. Therefore, the final rule should 

not change any incentives relative to the 

status quo, and it is unlikely that hotels 

will change their behavior in this 

respect as a result of the rule. 

A commenter disagreed with the 

Commission’s statement that consumer 

confusion will be a temporary cost as 

prices adjust.520 The commenter also 

argued that consumers may inefficiently 

under-consume when confronted with 

higher upfront prices. The Commission 

believes that consumers who may 

inefficiently under-consume due to the 

rule because they are anticipating 

hidden fees are the same consumers 

who are accurately accounting for 

hidden fees and efficiently consuming 

under the status quo. The percentage of 

consumers who expect and anticipate 

hidden fees is likely to be very small 

because, as discussed in the NPRM, 

empirical and theoretical models 

consistently show that consumers 

strongly and systematically 

underestimate the full price they will 

pay when faced with drip pricing, and 

they pay more than they otherwise 

would in a transparent marketplace.521

Therefore, if these consumers are savvy 

enough to adjust their expectations and 

accurately account for hidden fees 

under the status quo, then it is likely 

that they will quickly adjust their 

expectations after the final rule becomes 

effective and any under-consumption 

will be temporary. 

The commenter also misinterpreted 

the results of a study conducted in the 

live-event ticketing market, Blake et al. 

(2021) (the ‘‘Blake Study’’), in an effort 

to support the claim that seeing total 

price will deter consumers from making 

efficient and economically desirable 

purchases.522 The Blake Study found 


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523Blake, supra note 521. 

524FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP); FTC–2023–0064–3033 (The Rebel 

Lounge et al.). 

525FTC–2023–0064–3028 (Competitive Enterprise 

Institute); FTC–2023–0064–3208 (FreedomWorks). 

526FTC–2023–0064–3127 (U.S. Chamber of 

Commerce). 

527 Vicki G. Morwitz et al., Divide and Prosper: 

Consumers’ Reactions to Partitioned Prices, 35 J. 

Mktg. Rsch. 453 (1998), https://doi.org/10.1177/ 

002224379803500404. 

528FTC–2023–0064–3028 (Competitive Enterprise 

Institute). 

529FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

530See, e.g., id.; FTC–2023–0064–3140 (Merchant 

Advisory Group); FTC–2023–0064–3180 

(Independent Restaurant Coalition); FTC–2023– 

0064–3300 (National Restaurant Association); FTC– 

2023–0064–3202 (TechNet); FTC–2023–0064–3127 

(U.S. Chamber of Commerce); FTC–2023–0064– 

3173 (Center for Individual Freedom); FTC–2023– 

0064–3258 (National Taxpayers Union Foundation); 

FTC–2023–0064–2891 (Mary Sullivan, George 

Washington University, Regulatory Studies Center); 

FTC–2023–0064–3293 (Travel Technology 

Association); FTC–2023–0064–3133 (National 

Multifamily Housing Council and National 

Apartment Association); FTC–2023–0064–3296 

(Bay Area Apartment Association). 

531FTC–2023–0064–3028 (Competitive Enterprise 

Institute). 

532FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

533 Daniel S. Hamermesh, What’s to Know About 

Time Use?, 30 J. Econ. Surv. 198 (2016), https://

doi.org/10.1111/joes.12107. 

534 Id. 

that providing an upfront total price 

reduces both the quantity and quality of 

purchases relative to the inefficiently 

high levels of quantity and quality 

purchased under dripped prices. In 

other words, when consumers do not 

have truthful, timely, and transparent 

information about the final price, they 

purchase goods of higher quality and 

make more purchases than they would 

if they had full information. The 

commenter incorrectly implied that this 

reduction amounts to inefficient 

underconsumption when, in fact, it 

represents a return to an efficient level 

and quality of consumption compared 

to drip pricing. The authors explicitly 

concluded: ‘‘Our empirical results 

support our hypotheses: price 

obfuscation distorts both quality and 

quantity decisions.’’ 523

Five industry groups identified what 

they incorrectly labeled as three 

additional types of unquantified costs 

for consumers. The ‘‘costs’’ identified 

actually are either transfers from 

consumers to producers (resulting in no 

net loss for society) or reflect 

misunderstandings of the rule. These 

commenters claimed that prices would 

increase as businesses pass compliance 

costs onto consumers,524 that 

prohibiting businesses from displaying 

partitioned pricing would decrease 

transparency for consumers,525 and that 

forcing businesses to display all 

optional fees upfront would overload 

and confuse consumers with often 

irrelevant information.526 None of these 

are true costs resulting from the final 

rule. First, increased prices that result 

from the sellers’ increased compliance 

costs are a transfer of consumer surplus 

to producer surplus and do not result in 

a cost to society. Second, the rule does 

not prohibit itemization. As long as total 

price is clear and conspicuous and most 

prominent, businesses are free to 

display the components of total price if 

they so choose. Finally, the rule does 

not require businesses to display all 

optional fees upfront. Rather, businesses 

must disclose clearly and 

conspicuously, before the consumer 

consents to pay, the nature, purpose, 

and amount of any fee or charge 

imposed on the transaction that been 

excluded from total price. 

One policy organization commented 

on the study 527 cited in the NPRM that 

shows partitioned pricing decreases 

consumers’ ability to accurately recall 

total costs and increases their 

demand.528 The commenter argued that 

the conclusion cited in the NPRM does 

not follow from the study because 

participants who recalled a lower price 

could have known the total cost but 

misunderstood the question to be asking 

for the base price excluding the fees. 

This interpretation is incorrect because 

there was no ambiguity in the study 

question at issue; it explicitly asked for 

the total cost inclusive of all fees. 

(d) Public Comments: Unquantified 

Costs to Third Parties 

One commenter argued that, as 

consumer expectations adjust to upfront 

prices, inefficiently low spending may 

affect other businesses in the supply 

chain such as manufacturers, packagers, 

shippers, and warehouses.529 The 

commenter also argued that lower 

spending may affect live-event venues 

and ticket resellers due to decreased 

sales in food, drinks, and merchandise. 

In addition, the commenter claimed that 

lower spending will lead to lower sales 

tax revenue for State and local 

governments, causing them to borrow 

more money at high interest rates, raise 

taxes, or eliminate services. As 

discussed in detail in section V.E.2.c, 

the Commission believes that any 

inefficient underconsumption due to 

consumer confusion is likely to be 

temporary, as are any resulting costs to 

third parties. 

(e) Public Comments: Costs From 

Incorporating Contingent Fees Into Total 

Price 

Several commenters, including 

industry groups, policy organizations, 

and an academic, expressed concern 

that it would be difficult for firms to 

display total price in cases where total 

price is unknown because it depends on 

consumer conduct or choices.530 In 

cases where price is determined through 

customization, total price may not be 

known until after consumers have 

finalized their selection of options. The 

Commission addresses contingent fees 

in section III. 

2. Comments on Benefits 

Section V.D.2.a addresses the concern 

of some commenters that the NPRM’s 

benefit calculations are too high, and 

section V.D.2.b outlines several 

unquantified benefits identified by 

commenters. 

(a) Public Comments: Benefits Are Too 

High 

One commenter argued that benefits 

are too high because the Preliminary 

Regulatory Analysis overestimated 

consumer search costs that result from 

drip pricing.531 It argued that consumers 

benefit from seeing an advertisement 

with dripped fees compared to their 

position before seeing any 

advertisement. The Commission 

believes this is not the correct 

comparison to make when determining 

whether consumer search time will 

change as a result of the rule; a more apt 

comparison considers consumer benefit 

when faced with total price versus drip 

pricing. The Commission expects that 

the rule will decrease consumer search 

time, because consumers will spend less 

time searching for total price under the 

rule’s framework versus a dripped 

pricing framework. 

A commenter argued that the rule’s 

estimated benefits are too high because 

the value-of-time estimate of $24.40 is 

too high.532 The $24.40 figure is 

calculated by taking 82% of the 2022 

mean hourly wage from the Bureau of 

Labor Statistics. A meta-analysis of 

eleven studies conducted between 

2004–2015 finds that the value of time 

as a percentage of mean wage is about 

82% in the United States.533 In 

addition, previous studies indicate that, 

over time, people’s time has become 

more valuable as a fraction of what they 

earn.534 So, it is possible that the 

current percentage in 2024 may actually 

be higher than 82%. The final regulatory 

analysis in section V.E updates the 

value of time using the same method but 


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535FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

536 Id. 

537FTC–2023–0064–3127 (U.S. Chamber of 

Commerce). 538FTC–2023–0064–2883 (District of Columbia, 

Office of the People’s Counsel). 539FTC–2023–0064–3283 (National Consumer 

Law Center, Prison Policy Initiative, and advocate 

Stephen Raher). 

540FTC–2023–0064–3248 (DC Jobs With Justice 

on behalf of Fair Price, Fair Wage Coalition). 

541FTC–2023–0064–3146 (Institute for Policy 

Integrity, New York University School of Law). 

542FTC–2023–0064–3233 (NCTA—The Internet & 

Television Association); FTC–2023–0064–3238 

(Gibson, Dunn & Crutcher LLP); FTC–2023–0064– 

3294 (International Franchise Association). 

with the more recent 2023 mean hourly 

wage. 

The commenter further asserted that it 

would be more accurate to calculate the 

value of time as a percentage of the 

median hourly wage instead of the mean 

hourly wage, stating that ‘‘the mean 

wage is driven by a few outliers.’’ 535

Relying on the median hourly wage, 

however, would be incorrect and 

reflects a misunderstanding of how the 

value of time is calculated. The value of 

time initially was calculated as an 

absolute dollar amount per hour in the 

studies reviewed by the Hamermesh 

(2016) paper, and then expressed as a 

percentage of the mean hourly wage at 

that time. That percentage can be 

applied to the current mean hourly 

wage to calculate an updated value of 

time. If the Commission expressed the 

value of time as a percentage of the 

median wage, this would not be a ‘‘more 

accurate’’ calculation of the value of 

time as the commenter suggests, but 

simply a different way of expressing the 

same value of time estimated by 

Hamermesh (2016). 

The commenter also argued that the 

Commission’s valuation of time estimate 

is inaccurate because some consumers 

may have lower valuations of time, such 

as consumers who earn no wages or 

lower wages, and consumers who 

‘‘enjoy shopping’’ and may not believe 

they incur costs from searching.536

These concerns are consistent with the 

Commission’s estimated value of time, 

which captures an average of a 

representative group of American 

consumers across eleven studies; some 

individuals will have lower valuations 

of time, and some will have higher. 

Furthermore, the Commission 

distinguishes between efficient and 

inefficient searching by consumers. 

Consumers, based on their preferences, 

may find some amount of search, or 

comparison shopping, to be beneficial to 

their consumption choices. A consumer 

will naturally choose an efficient level 

of search such that the marginal benefit 

of discovering an additional different 

price or comparable good equals the 

marginal cost of the time and effort to 

perform the additional search. The 

Commission recognizes the purpose of 

this efficient level of search and does 

not count it as a harm. When consumers 

face drip pricing, they must spend 

additional time and effort to acquire full 

pricing information allowing them to 

properly comparison shop. This 

additional time and effort results in an 

inefficient level of search that harms 

consumers with no countervailing 

benefit. In the Commission’s final 

regulatory analysis, the estimate of cost 

savings through reduced search time is 

based on the estimated difference 

between consumer search time under 

drip pricing and consumer search time 

under upfront pricing; that is, the 

estimate is based solely on the estimate 

of the inefficient level of search. 

Finally, another commenter argued 

that benefits are too high in the shortterm lodging calculation because the 

Preliminary Regulatory Analysis 

estimated the reduction in listings 

viewed as a result of the proposed rule 

using data from a study done in the liveevent ticketing market.537 However, the 

Commission’s base number of listings 

viewed under the status quo was taken 

from studies conducted in the shortterm lodging industry. The live-event 

ticketing study provided a scaling factor 

that the Commission used to estimate a 

percentage reduction in listings viewed 

in response to the rule. The commenter 

neither demonstrated why the 

Commission’s method overestimated the 

reduction in listings viewed nor 

provided the Commission with 

additional data. 

(b) Public Comments: Unquantified 

Benefits 

The NPRM identified the rule’s 

unquantified benefits, primarily a 

reduction in deadweight loss as 

consumers make more efficient 

purchasing decisions. Several comments 

from consumer and worker protection 

groups identified additional 

unquantified benefits of the rule to lowincome households,538 incarcerated 

people and their families,539 and to 

restaurant workers.540 Although these 

comments no longer apply to the final 

rule, the Commission acknowledges that 

the broader rule was likely to positively 

impact some vulnerable populations 

like those discussed in the comments 

and may have had second-order effects 

on housing security and the labor 

market. 

One commenter also recommended 

that the Commission further explain or 

quantify why the rule would result in 

enforcement resource savings as stated 

in the NPRM.541 The Commission does 

not quantify the net effect of the rule on 

enforcement resources due to a lack of 

data, but discusses in detail the rule’s 

enforcement benefits in section V.A. 

Based on its experience, the 

Commission finds that the resources it 

needs to expend under the two-step 

pathway pursuant to section 19(a)(2) are 

typically greater because the 

Commission needs to initiate two 

separate proceedings. 

3. Comments on the Economy-Wide 

Break-Even Analysis 

In this section, the Commission 

addresses comments specific to the 

economy-wide break-even analysis of 

the Preliminary Regulatory Analysis. 

Section V.D.3.a addresses comments 

that argued the Commission’s breakeven analysis contained incorrect 

assumptions or errors; section V.D.3.b 

addresses comments that claimed a 

break-even analysis is not enough to 

justify an economy-wide rule; and 

section V.D.3.c addresses a comment 

that argued the break-even analysis is 

satisfactory and recommended further 

analysis to strengthen it. 

(a) Public Comments: Break-Even 

Analysis Has Incorrect Assumptions or 

Contains Errors 

Three commenters argued that the 

Commission’s assumption that 90% of 

firms are already in compliance with the 

proposed rule was inaccurate.542 This 

comment does not apply to the final 

rule, which no longer contains an 

economy-wide analysis. However, the 

Commission reaffirms its break-even 

calculation in the Preliminary 

Regulatory Analysis, and acknowledges 

uncertainty regarding the number of 

firms in the economy that currently 

employ unfair or deceptive fees or 

charges and that would need to incur 

additional costs to comply with the rule. 

To address the uncertainty, the 

Preliminary Regulatory Analysis 

provided both the break-even benefits 

required if 90% of firms in the economy 

are already compliant with the rule, as 

well as the break-even benefits required 

if 50% of the firms were already 

compliant with the rule. 


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543FTC–2023–0064–3238 (Gibson, Dunn & 

Crutcher LLP). 

544 Id. 

545See, e.g., id.; FTC–2023–0064–3127 (U.S. 

Chamber of Commerce); FTC–2023–0064–2891 

(Mary Sullivan, George Washington University, 

Regulatory Studies Center); FTC–2023–0064–3173 

(Center for Individual Freedom); FTC–2023–0064– 

3208 (FreedomWorks); FTC–2023–0064–3143 (ACA 

Connects—America’s Communications 

Association); FTC–2023–0064–3258 (National 

Taxpayers Union Foundation). 

546See, e.g., FTC–2023–0064–3133 (National 

Multifamily Housing Council and National 

Apartment Association); FTC–2023–0064–3143 

(ACA Connects—America’s Communications 

Association); FTC–2023–0064–3258 (National 

Taxpayers Union Foundation); FTC–2023–0064– 

3197 (American Beverage Licensees). 

547Office of Mgmt. & Budget, Circular A–4 (Sep. 

17, 2003) (hereinafter, OMB Circular A–4), https:// 

obamawhitehouse.archives.gov/omb/circulars_

a004_a-4/. 

548FTC–2023–0064–3146 (Institute for Policy 

Integrity, New York University School of Law). 

One commenter also argued that the 

$6.65 average annual per-consumer 

benefit number in the Preliminary 

Regulatory Analysis is too low because 

the Commission calculated the 

necessary break-even benefit level by 

dividing estimated costs by all U.S. 

adults, rather than only consumers who 

make live-event ticket and short-term 

lodging purchases.543 The Commission 

emphasizes that the $6.65 figure from 

the Preliminary Regulatory Analysis is 

an average per-person benefit. In the 

same way that the estimated attorney 

hours assumes that some small 

businesses will not hire an attorney to 

ensure compliance, the benefit per 

consumer figure reflects the fact that 

some adults will not encounter dripped 

fees. The Commission does not dispute 

that some consumers will see much 

higher benefits than others. The same 

argument applies to the final rule, 

where the Commission recalculates the 

average annual per-consumer breakeven benefit level using only the costs 

from covered goods or services. 

Finally, the same commenter 

contended that both the one-time and 

annual costs for the high-end estimates 

in table 2 of the Preliminary Regulatory 

Analysis were calculated incorrectly.544

This comment no longer applies to the 

final rule, which does not contain an 

economy-wide break-even analysis. 

(b) Public Comments: Break-Even 

Analysis Is Not Enough To Justify an 

Economy-Wide Rule 

Some commenters disagreed that the 

rule should apply to the whole economy 

when the Preliminary Regulatory 

Analysis quantifies a net benefit for two 

industries and relies on a break-even 

analysis for the remainder of the 

economy.545 Other commenters 

similarly stated that the Preliminary 

Regulatory Analysis should include an 

industry-by-industry cost-benefit 

analysis.546 The final rule is limited to 

only covered goods or services, which 

are offered by the live-event ticketing 

and short-term lodging industries. 

The Commission emphasizes that a 

break-even analysis is encouraged by 

OMB Circular A–4 when there are 

unquantifiable costs or benefits, and 

affirms that its break-even analysis in 

the Preliminary Regulatory Analysis is 

consistent with OMB guidance.547 In the 

final regulatory analysis, the 

Commission identifies some of the 

unquantified benefits to the rule and 

provides a similar break-even analysis 

for the live-event ticketing and shortterm lodging industries. The 

Commission also provides benefit-cost 

analyses demonstrating that the 

quantified benefits exceed the 

quantified costs. 

(c) Public Comments: Break-Even 

Analysis Is Satisfactory 

Conversely, another commenter noted 

that the Commission’s break-even 

analysis is satisfactory and suggested 

the Commission provide further 

analysis to support the conclusion that 

time savings resulting from the rule are 

likely to exceed the break-even 

threshold.548 Although this comment no 

longer applies to the final rule, which 

focuses on addressing hidden and 

misleading fees in the live-event 

ticketing and short-term lodging 

industries, the Commission 

acknowledges that there is economic 

support for a broader rule. 

E. Economic Regulatory Analysis of the 

Final Rule’s Costs and Benefits 

The Commission has narrowed the 

application of the final rule to a limited 

set of covered goods or services, which 

comprise live-event ticketing and shortterm lodging. This in turn necessitates 

revisions to the Preliminary Regulatory 

Analysis. The final regulatory analysis 

no longer includes the economy-wide 

break-even analysis. The Commission 

provides the per-consumer break-even 

benefit levels for the live-event ticketing 

and short-term lodging industries, as 

well as quantified benefits and costs for 

these industries. After incorporating 

these revisions and updating numbers 

based on recent data releases, the 

Commission confirms in the final 

regulatory analysis that the benefits of 

the rule exceed the costs. Specifically, 

the Commission estimates that the 

quantified benefits of the rule will 

exceed its quantified costs, and the 

Commission believes that the total 

benefits of the rule (quantified and 

unquantified) will outweigh its total 

costs (quantified and unquantified). 

The Commission discusses in the 

final regulatory analysis the projected 

impact of the rule’s prohibition on 

offering, displaying, or advertising any 

price of a covered good or service 

without clearly and conspicuously 

disclosing total price, as well as the 

rule’s prohibition on misrepresentations 

regarding any fee or charge, including 

the nature, purpose, amount, or 

refundability of any fee or charge, and 

the identity of the good or service for 

which the fee or charge is imposed. The 

Commission’s analysis also assesses the 

impact of the rule’s required disclosures 

of the nature, purpose, and amount of 

any fee or charge imposed on the 

transaction that has been lawfully 

excluded from total price, the identity of 

the good or service for which the fee or 

charge is imposed, and the final amount 

of payment. When possible, the 

Commission quantifies the benefits and 

costs and notes where some potential 

benefits and costs are unquantified. If a 

benefit or cost is quantified, the sources 

of the data relied upon are indicated. If 

an assumption is needed, the 

Commission makes clear which 

quantities are being assumed. 

The Commission uses ten years for 

the time period of analysis because the 

Commission’s trade regulation rules are 

subject to review every ten years. Tables 

1 and 2 summarize the main findings of 

the final regulatory analysis. Table 1 

presents the potential costs, benefits, 

and resulting net benefits for the liveevent ticketing and short-term lodging 

industries. Quantified benefits in these 

industries derive from time savings 

consumers would experience due to 

greater price transparency, leading to 

more efficient shopping processes. 

Quantified costs derive from the costs 

firms would incur to comply with the 

rule. 


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549We use 3% and 7% for the discount rate, 

consistent with Office of Management and Budget’s 

guidance. OMB Circular A–4, supra note 547. 

The quantified net benefits for the 

live-event ticketing and short-term 

lodging industries are positive. There 

are also unquantified benefits, which 

may arise from a reduction in 

deadweight loss as consumers 

experience greater price transparency 

and make fewer mistake purchases. 

Unquantified costs may stem from 

potential adjustment costs or consumer 

confusion as expectations adjust under 

the rule. 

For both quantified benefits and costs, 

the final regulatory analysis provides a 

range representing the set of 

assumptions that result in a ‘‘low-end’’ 

or ‘‘high-end’’ estimate. These estimates 

are calculated as present values over a 

ten-year period. Benefits and costs are 

more valuable to society the sooner they 

occur. A discount rate (3% or 7%) is 

used to adjust estimated benefits and 

costs for differences in timing; a higher 

discount rate is associated with a greater 

value for benefits and costs in the 

present.549

BILLING CODE 6750–01–P 


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550Howard A. Shelanski et al., Economics at the 

FTC: Drug and PBM Mergers and Drip Pricing, 41 

Rev. Indus. Org. 303 (2012), https://doi.org/ 

10.1007/s11151-012-9360-x. 

551White House, How Junk Fees Distort 

Competition (Mar. 21, 2023), https://

www.whitehouse.gov/cea/written-materials/2023/ 

03/21/how-junk-fees-distort-competition/; Brian 

Deese et al., White House, The President’s Initiative 

on Junk Fees and Related Pricing Practice (Oct. 26, 

2022), https://www.whitehouse.gov/briefing-room/ 

blog/2022/10/26/the-presidents-initiative-on-junkfees-and-related-pricing-practices/; Glenn Ellison, A 

BILLING CODE 6750–01–C 

As discussed in more detail in section 

V.E.3, the Commission only quantifies 

benefits from reductions in consumer 

search costs. However, the Commission 

notes there are likely additional 

consumer benefits in the form of 

reduced deadweight loss. Since the 

Commission is unable to quantify all of 

the final rule’s potential benefits, the 

final regulatory analysis instead 

calculates the minimum value for the 

average consumer that the final rule 

would need to generate in order for its 

benefits to outweigh its quantified costs. 

Table 2 presents low-end and high-end 

estimates of the total quantified costs 

and the necessary ‘‘break-even benefit’’ 

per consumer. Under the high-end cost 

assumptions with a 7% discount rate, 

the Commission’s analysis finds that 

each consumer would need to 

experience a benefit of $0.33 per year 

over ten years for the rule’s benefits to 

exceed its quantified compliance costs. 

Under the low-end cost assumptions 

with a 3% discount rate, that perconsumer amount is $0.08 per year over 

ten years. As noted, the Commission 

believes that the necessary break-even 

benefit per consumer is likely between 

$0.08 and $0.33 per year over ten years, 

depending on which set of assumptions 

is used. 

1. Economic Rationale for the Final Rule 

The final rule addresses the economic 

problem of incomplete and insufficient 

price information by businesses that 

shroud the full price from the consumer 

during parts of the purchasing process, 

which harms both consumers and 

honest competitors. Not including 

mandatory fees in the full price when 

consumers start the purchasing process 

for a good or service may result in a 

market failure. Firms may shroud the 

full price to the consumer through the 

practice of ‘‘drip pricing,’’ which is ‘‘a 

pricing technique in which firms 

advertise only part of a product’s price 

and reveal other charges later as the 

customer goes through the buying 

process.’’ 550 Discovering the lowest full 

price prior to a final purchase by going 

through the checkout process with 

multiple firms is inefficient and 

involves additional consumer search 

costs. In some cases, taking the time to 

search for the full price from one firm 

may result in the consumer losing the 

opportunity to purchase the product 

from another firm. Drip pricing and the 

resulting imposition of additional 

search costs make it more difficult for 

consumers to compare prices across 

platforms, which may soften price 

competition in the market.551


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Model of Add-On Pricing, 120 Q.J. Econ. 585 (2005), 

https://www.jstor.org/stable/25098747. 

552Morwitz, supra note 527. 

553Baye, supra note 521. 554These assumptions are made for exposition 

purposes to abstract from the issues of market 

power in pricing and strategic interactions between 

firms. The general ideas from this simple 

framework extend to differentiated products and 

strategic interactions between a smaller number of 

firms. 

A market failure may also occur when 

firms shroud full price through nonaggregated partitioned pricing, in which 

all of the components of the full price 

(base price, fees, etc.) are presented to 

consumers without the full price 

itself.552 Non-aggregated partitioned 

pricing, like drip pricing, imposes costs 

on consumers by requiring them to 

spend additional time to calculate the 

full price for themselves. Consumers 

tend to underestimate the full price 

when faced with partitioned pricing, 

and this underestimation leads to an 

increase in demand. The increased 

demand from erroneous price 

calculations, in turn, leads to inefficient 

overconsumption by consumers. 

(a) Shrouded Pricing as a Cause of 

Market Failure 

A well-functioning market depends, 

in part, on consumers having accurate 

information regarding the price, and 

other attributes, of the goods or services 

being offered. Firms that engage in drip 

pricing or employ partitioned pricing 

create a friction in the operation of the 

market by imposing costs on consumers 

to acquire price information. Several 

economic harms may arise from this 

friction. First, holding consumer choices 

and prices fixed, the added search cost 

to acquire price information harms 

consumers with no countervailing 

benefit to firms. Second, because 

shrouded prices make comparison 

shopping more difficult, consumers 

might make suboptimal consumption 

decisions. In fact, consumers may find 

it too costly to search for full and 

accurate price information for some or 

all goods or services under 

consideration. The lack of full price 

information may lead consumer demand 

to become less sensitive, i.e., less 

elastic, to changes in price, and 

consumers will accept higher (qualityadjusted) prices than they would if they 

were fully informed with clear and 

upfront pricing. This, in turn, leads to 

a third effect: since shrouded prices 

make it harder for consumers to 

compare prices, some firms may gain 

market power that allows them to raise 

prices or decrease quality.553 Firms may 

further distort the market outcome by 

changing the products they offer to 

consumers relative to a market where 

prices are transparent. 

The Commission discusses further the 

first of these effects, the added search 

costs incurred by consumers to acquire 

complete price information, in section 

V.E.2.a.i and quantifies these costs in 

the live-event ticketing and short-term 

lodging industries in section V.E.3.c and 

V.E.3.d. The Commission discusses the 

welfare impact of the second of these 

effects, the distortion of consumers’ 

decisions due to lack of full 

information, in this section. The third 

effect, firms increasing their market 

power in response to increases in search 

costs, would exacerbate any welfare 

losses caused by the distortion of 

consumers’ decisions due to the lack of 

full price information. However, the 

Commission lacks the data to quantify 

or distinguish their effects on 

deadweight loss. 

The distortion of consumers’ 

decisions due to the lack of full price 

information, the second effect discussed 

in the previous paragraph, can be 

illustrated through a simple model of 

supply and demand. For simplicity of 

exposition, the analysis assumes that 

there are many firms, each selling a 

homogeneous product (i.e., good or 

service). The analysis further assumes 

that firms can adjust their prices and 

pricing strategies, but that the quality of 

the product is fixed.554

A useful starting point is to consider 

the baseline market outcome where 

consumers are fully informed; that is, 

consumers know the full price upfront 

(either because firms state the full price 

upfront or because consumers can fully 

and correctly predict any add-on 

prices). Since all firms sell the same 

product, competition will lead all firms 

to set equal prices at marginal cost. 

Figure 1 illustrates the baseline market 

outcome. The curve Dupfront represents 

consumers’ demand when they are fully 

informed. The supply curve S 

represents the marginal cost to firms of 

producing a given quantity of the 

product. The intersection of Dupfront with 

S, denoted by point A, at quantity 

Qupfront and price Pupfront, represents the 

outcome. The analysis will refer to this 

as the ‘‘fully informed outcome.’’ At 

point A, the marginal benefit to 

consumers from consuming one 

additional unit is equal to the marginal 

cost to firms from the production of one 

more unit of the product. 

As long as there are no externalities 

(i.e., impacts on third parties beyond the 

consumers and firms under 

consideration) from the consumption of 

the product, this outcome is efficient; 

that is, point A represents the 

consumption level of the product that 

provides the greatest benefit to society. 

The benefit to society is measured by 

the sum of the benefit to consumers, 

called consumer surplus, and the 

benefit to firms, called producer surplus 

or profit. Consumer surplus is the net 

benefit consumers experience from 

consuming the product after accounting 

for their expenditure on the product. 

Consumer surplus is given by the 

difference between the area of trapezoid 

ACFG, the value to consumers from 

consuming Qupfront units of the product, 

and the area of rectangle ABFG, the total 

expenditure on the product (Pupfront * 

Qupfront); thus, consumer surplus is given 

by the area of triangle ABC. Producer 

surplus is the net benefit to firms from 

selling the product after accounting for 

their costs to provide the product. 

Producer surplus is given by the 

difference between rectangle ABFG, the 

total revenue from the product, and the 

area of trapezoid AEFG, the cost to firms 

from producing Qupfront units of the 

product; thus, producer surplus is given 

by the area of triangle ABE. The net 

benefit to society is then given by the 

area of triangle ACE. 


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555Blake, supra note 521; Raj Chetty et al., 

Salience and Taxation: Theory and Evidence, 99 

Am. Econ. Rev. 1145 (2009), https://doi.org/ 

10.1257/aer.99.4.1145. 

556For simplicity of exposition, the analysis 

assumes that all firms follow the same shrouding 

strategy and set the same t. 

557This shift is entirely analogous to the shift that 

would occur from a government subsidy. When a 

subsidy is provided, the price consumers pay is 

lower than the price charged by firms. 

As previously discussed, shrouded 

pricing makes it more difficult for 

consumers to ascertain the full price of 

the product. In the case of drip pricing, 

consumers will see the base price before 

seeing additional mandatory price 

components such as convenience fees. 

Consumers may or may not be unaware 

of the additional fees at the time they 

make a purchase decision. If consumers 

are fully aware of the additional fees, or 

anticipate them correctly, the outcome 

remains point A, which is efficient. 

However, there is evidence that 

consumers respond differently to a 

change in the base price offered upfront 

than to changes in the fees disclosed 

separately from the base price. 

Specifically, economic studies provide 

evidence that consumers react less to 

price changes through fees than they do 

to price changes through the base 

price.555 That is, consumer demand is 

less elastic to the fee component of the 

full price than it is to the base price. 

One possible rationale for this 

phenomenon is that consumers are fully 

aware of base prices but are not, or only 

partially, aware of fees. 

The Commission analyzes the impact 

drip pricing has on market outcomes in 

the previous framework in two stages. 

The analysis starts by examining the 

case where consumers are completely 

unaware of the additional fees, namely, 

they assume that the base price offered 

upfront is the full price. The analysis 

then examines the case where 

consumers are aware that a fee might be 

added later but do not correctly estimate 

the size of this fee. Note that this case 

may arise under a variety of 

circumstances. For example, all 

consumers could be partially aware of 

the fees, some consumers could be fully 

aware of the fees while others are totally 

unaware, or there could be a mixture of 

consumers exhibiting different degrees 

of awareness. 

In the first stage of the analysis, 

Pbase,unaware denotes the base prices firms 

offer upfront, and Ptotal,unaware denotes 

the full price firms charge, which is 

equal to the base price plus t, the sum 

of mandatory per unit fees not included 

in the base price: Ptotal,unaware = 

Pbase,unaware + t.556 Consumers determine 

their consumption according to 

Pbase,unaware, unaware that they are 

actually going to pay Ptotal,unaware. This 

difference between the price consumers 

believe they are paying and the price 

firms are actually charging leads to an 

expansion in consumer demand relative 

to demand when consumers are fully 

informed. Specifically, as illustrated by 

Figure 2, the firms’ deception causes an 

upward shift in demand equal to the 

price difference, t, from Dupfront to 

Dunaware. The intersection of Dunaware

with S, illustrated by point J, at quantity 

Qunaware and price Ptotal,unaware,represents 

the outcome when consumers are 

unaware of the fee and only observe the 

base price.557


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558Blake, supra note 521; Chetty, supra note 555. 

559This phenomenon has been observed, for 

example, in the live-event ticketing industry. See 

Blake, supra note 521. 

Consumer surplus is now equal to the 

area of triangle CHI minus the area of 

triangle IJK. Relative to the fully 

informed outcome, consumer surplus 

decreases by the area of trapezoid ABHI, 

the decrease in consumer surplus due to 

the price increase, and the area of 

triangle IJK, the decrease in consumer 

surplus due to the deceptive pricing 

strategy. Producer surplus is now equal 

to the area of triangle EHJ. It increases, 

relative to the fully informed outcome, 

by the area of trapezoid ABHJ. This 

trapezoid illustrates the transfer of 

surplus from consumers to firms due to 

the deceptive practice of shrouded 

pricing. The net effect on society is now 

the area of triangle ACE minus the area 

of triangle AJK. Relative to the fully 

informed outcome, the benefit to society 

decreases by the area of triangle AJK (the 

combined change in consumer and 

producer surplus). This decrease in 

social surplus is the harm, also referred 

to as deadweight loss, caused by the full 

shrouding of the fee. 

The analysis now turns to the case 

where consumers are aware of the 

possibility of additional fees but do not 

fully anticipate their magnitude. As 

previously discussed, academic research 

suggests that this might be the case.558

This reduced salience would increase 

quantity demanded and incur a 

deadweight loss compared to the fully 

informed outcome (illustrated in Figure 

1), although both the increase in 

quantity demanded and the deadweight 

loss would be smaller than in the case 

where consumers were fully unaware of 

the fees (illustrated in Figure 2). 

Essentially, the aggregate demand curve 

will lie somewhere between the upfront 

demand curve in Figure 1 and the fully 

shrouded demand in Figure 2. This 

aggregate demand can come from (the 

same) partial awareness by all 

consumers or a mixture of different 

degrees of awareness by different 

consumers. A technical appendix in 

section V.E.6 provides a more detailed 

model of the impact of consumers’ 

partial awareness. 

In summary, the shrouding of prices 

distorts the market outcome by leading 

consumers to consume more than they 

would if they were fully aware of the 

full price. The overconsumption by 

consumers leads to a social cost in the 

form of deadweight loss because the 

resources used to produce the product 

would have been put to better use if 

consumer demand had not been 

distorted in this manner. The 

deadweight loss from the inefficient 

consumption level is one component of 

the welfare loss generated by drip 

pricing, in addition to the increase in 

consumer search costs and the possible 

shift in pricing and product offerings 

due to increased market power. 

Collectively, these effects represent a 

market failure. 

Shrouded pricing likely cannot be 

mitigated by competitive forces alone 

once it has become pervasive in a 

market. Although consumers would 

prefer upfront full prices, it is unlikely 

that an individual firm in a market with 

shrouded prices could increase its 

market share by providing its full price 

upfront. Under the expectation of 

shrouded prices, consumers may 

inadvertently interpret such a firm’s 

upfront full price as a higher base price, 

with fees added separately, leading the 

firm to lose, rather than gain, business. 

The distortion of consumer expectations 

caused by shrouded pricing thus 

prevents a shift to upfront pricing 

through competition. 

In many markets, goods and services 

are differentiated, with higher quality 

items selling at higher prices. In such 

markets, drip pricing may lead to 

outcomes characterized by inefficiently 

high qualities in addition to the 

inefficiently high quantities previously 

discussed.559 Consumers may respond 

to fully disclosed prices in these 

markets by purchasing goods or services 

of lower, more efficient quality in 

addition to purchasing lower, more 

efficient quantities of goods or services. 

(b) Shrouded Pricing as a Source of 

Biased Expectations 

As explained in section V.E.1.a, firms 

have incentives to distort consumer 

demand toward an inefficient 

equilibrium. This inefficiency may also 


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560 David Laibson, Harvard U., Drip Pricing: A 

Behavioral Economics Perspective, Address at the 

FTC (May 21, 2012), https://www.ftc.gov/sites/ 

default/files/documents/public_events/economicsdrip-pricing/dlaibson.pdf. 

561Morwitz, supra note 527. 

562Shelle Santana et al., Consumer Reactions to 

Drip Pricing, 39 Mktg. Sci. 188 (2020), https://

doi.org/10.1287/mksc.2019.1207. 

563Rasch, supra note 521. 

564Chetty, supra note 555. 565See Blake, supra note 521. 

arise in a behavioral context.560 By 

shrouding full prices through drip or 

partitioned pricing, a firm may bias its 

consumers’ price expectations. For 

example, consumers may respond to 

dripped prices by anchoring their 

beliefs on the base price and, thus, 

systematically underestimate the price 

of the good or service.561 This 

underestimation, whether by all 

consumers, or a subset of consumers, 

leads to a similarly inefficient 

equilibrium in which the good or 

service is overconsumed and society 

suffers a deadweight loss. 

Several studies show how consumer 

behavior changes because of drip 

pricing. One study found that when 

optional surcharges are dripped, 

individuals are more likely to select a 

more expensive option (after including 

surcharges) than what they would have 

chosen under upfront pricing.562 Even 

when the participants became aware of 

the additional fees, they were reluctant 

to restart the purchase process because 

they perceived high search costs from 

doing so and inaccurately assumed that 

all firms charge the same fees. A 

different economics experiment found 

that consumers encountering drip 

pricing are more likely to make 

purchasing mistakes if they are 

uncertain about the extent of the drip 

pricing.563

Another prominent study looked at 

how consumers respond to the salience 

of sales tax on goods, which affects the 

full price of a product.564 In this study, 

when the grocery store displayed the 

full price of each item on shelves as part 

of a field experiment, people purchased 

fewer goods relative to the control 

scenario in which sales tax was added 

at checkout, despite knowing that the 

final price being charged had not 

changed. In 2014, StubHub conducted 

an experiment in which some 

consumers were presented with upfront 

prices inclusive of fees while other 

consumers were presented a base price 

upfront with fees hidden until checkout. 

This experiment revealed that 

presenting consumers with full prices 

upfront reduced both the quantity and 

quality of tickets purchased relative to 

presenting consumers with dripped 

prices.565

2. Economic Effects of the Final Rule 

The model of incomplete price 

information, described in section 

V.E.1.a, provides a framework for 

assessing the potential costs, benefits, 

and transfers associated with the final 

rule in the live-event ticketing and 

short-term lodging industries. The rule 

will result in positive net benefits if it 

allows consumers to learn total price 

more easily, improves consumer 

comprehension of fees and charges as 

they relate to total price, facilitates 

comparison shopping, reduces search 

costs, or otherwise allows consumers to 

make choices that increase net welfare. 

The Commission believes the rule will 

accomplish these goals in the live-event 

ticketing and short-term lodging 

industries. 

The Commission finds in section 

V.E.1 that consumer demand in the liveevent ticketing and short-term lodging 

industries is distorted by incomplete 

price information—in simple terms, 

consumers respond to lower base prices 

even if fees are revealed or added up 

later in a transaction. Thus, if a seller in 

these industries uses hidden fees, that 

seller may acquire a larger market share 

by advertising lower initial prices than 

other sellers not using hidden fees. 

Absent the rule, competitive forces will 

drive other firms in these industries to 

also use hidden fees, as has become 

evident as noted in section II.B. If firms 

do not use hidden fees, they may have 

to accept a lower market share, even 

though their full prices to consumers are 

similar to (or lower than) their 

competitors. Thus, the Commission 

finds that with the final rule, firms that 

currently do not use drip pricing will no 

longer face the competitive pressure to 

employ hidden fees and may experience 

higher revenue if consumers can more 

easily compare prices across firms. The 

Commission also finds that the rule will 

generate costs as firms that currently 

employ hidden or misleading fees adjust 

how they convey prices to consumers. 

Overall, the Commission expects the 

rule will increase economic efficiency 

through improved consumer price 

calculations, resulting in reduced 

deadweight loss and reduced consumer 

search time that exceeds the costs to 

firms of providing more transparent 

pricing. It may also facilitate price 

comparison by consumers, increase 

competition among sellers, and put 

downward pressure on prices. Due to a 

lack of data, it is difficult to fully 

quantify all the potential effects of the 

final rule. Where there may be impacts 

that the Commission is unable to 

quantify, it provides a qualitative 

description. 

(a) General Benefits of the Final Rule 

Consumers will benefit from the rule 

in several ways. In addition to 

reductions in search costs and 

deadweight loss, which are described in 

greater detail herein, the Commission 

expects there to be unquantified benefits 

for consumers from the rule, including 

reduced frustration and consumer stress 

associated with surprise fees that distort 

the purchasing process. 

i. Reductions in Search Costs 

Consumers will save time searching 

for the total price of live-event tickets 

and short-term lodging as a result of the 

rule. In a well-functioning market, 

consumers find it beneficial to 

comparison shop for low prices. When 

mandatory fees are obscured or 

misrepresented, however, consumers 

learn the full price at the end of the 

process and may need to re-assess 

whether they wish to purchase at a 

higher price than originally expected or 

to look for other options. Consumers 

incur longer search times to discover 

full prices and make informed 

purchasing decisions. The final rule will 

eliminate the need for additional, 

inefficient amounts of time to determine 

total price from sellers that do not 

already provide total price upfront. The 

Commission quantifies the reduction in 

search costs in the live-event ticketing 

and short-term lodging industries. 

ii. Reductions in Deadweight Loss 

As discussed in section V.E.1.a, 

incomplete pricing information may 

distort consumer demand. This 

distortion will lead to an inefficient 

market equilibrium and generate 

deadweight loss, which results from 

consumers purchasing higher quantities 

of the good or service than they would 

if fully informed. Under the final rule, 

consumers will learn total price upfront. 

Thus, the rule will likely mitigate 

distorted consumer demand and prevent 

welfare-reducing transactions. 

Resources supporting overconsumption 

will become available for better societal 

use, and the deadweight loss will be 

reduced or eliminated. 

The disclosure of total price may also 

reduce mistake purchases with respect 

to product quality. Drip pricing can lead 

consumers to purchase goods of 

inefficient quality; the final rule will 

allow consumers to choose more 

efficient levels of quality. The 

Commission does not quantify the 

reduction in deadweight loss but finds 


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566See OMB Circular A–4, supra note 547 

(‘‘Transfer payments are monetary payments from 

one group to another that do not affect total 

resources available to society. A regulation that 

restricts the supply of a good, causing its price to 

rise, produces a transfer from buyers to sellers.’’ 

Even though a ‘‘net reduction in the total surplus 

(consumer plus producer) is a real cost to society, 

[ ] the transfer from buyers to sellers resulting from 

a higher price is not a real cost since the net 

reduction automatically accounts for the transfer 

from buyers to sellers.’’). 

567This basic regulatory review also captures the 

time it takes for firms to determine how a 

nationwide rule interacts with any state-level 

regulations to which they are already subject. 

568The Commission requested additional 

information on potential compliance hours in the 

NPRM, but it did not receive consistent data. 

Therefore, the Commission uses the same set of 

assumptions on hours as used in the NPRM but 

notes that the live-event ticketing and short-term 

lodging industries are likely to have already 

established systems necessary to comply with the 

final rule due to operating in jurisdictions with 

similar regulations. 

569 It is possible that presently compliant firms 

would also need to reoptimize prices in response 

to shifts in market equilibria. That is, the shift in 

an industry’s equilibrium resulting from the rule 

could be significant enough that all firms in the 

industry, compliant or not, would need to adjust 

prices. Firms regularly reoptimize prices in 

response to market shifts, but it is possible that this 

price adjustment would require already compliant 

firms to incur additional costs. The Commission 

solicited, but did not receive, the data necessary to 

quantify this potential cost to firms. 

that it is a positive benefit to the final 

rule. 

(b) Welfare Transfers 

The Commission expects that prices 

in the live-event ticketing and shortterm lodging industries will adjust in 

response to the transparency facilitated 

by the rule. These price adjustments 

transfer welfare from one side of the 

market to the other; consumer welfare 

will increase, and producer profits will 

decrease by the same amount. Typically, 

transfers of welfare from one set of 

people in the economy to another are 

documented in a regulatory analysis, 

but do not change net social welfare.566

Consequently, while it is likely that the 

rule will result in transfers of welfare, 

the Commission does not attempt to 

estimate these transfers. 

(c) General Costs of the Final Rule 

Firms in the live-event ticketing and 

short-term lodging industries will likely 

do a basic regulatory review to 

determine how the rule applies to 

them.567 Firms that are not already in 

compliance with the rule may incur 

additional costs to re-optimize the price 

of goods and services. These firms may 

also incur costs to adjust how they 

display pricing information to disclose 

total price whenever the price of a good 

or service is displayed. For example, 

firms may need to update websites or 

reprint advertisements to comply with 

the rule. 

In addition, the Commission notes 

that there may be other indirect shortterm costs that the Commission cannot 

quantify. For instance, consumers who 

are used to an existing pricing structure 

that separately discloses mandatory fees 

at the end of the purchase process may 

mistakenly make inefficient purchases 

while adjusting to the new regime of 

upfront total price. Specifically, 

consumers accustomed to dripped liveevent ticketing fees may initially underconsume when shopping for tickets 

with upfront total price. The societal 

cost of such inefficiencies would be 

temporary and decrease as consumers 

adjust to the truthful, timely, and 

transparent pricing required by the rule. 

While the rule allows businesses to 

exclude shipping charges from total 

price until the point at which a 

consumer may consent to pay, the rule 

requires any internal handling costs that 

were previously disclosed at the end of 

the purchase process to be incorporated 

in total price. Since shipping and 

handling charges are sometimes 

combined, businesses may have to 

change how they account for handling 

costs and how they advertise shipping 

and handling costs to comply with this 

provision. 

3. Quantified Welfare Effects 

This section quantifies the potential 

benefits and costs of the final rule for 

the live-event ticketing industry and the 

short-term lodging industry. The 

Commission provides quantitative 

estimates where possible for these 

industries, and it describes benefits and 

costs that can only be assessed 

qualitatively. The Commission estimates 

that the quantified benefits will exceed 

the quantified costs, and the 

Commission believes that the total 

benefits (quantified and unquantified) 

will outweigh the total costs (quantified 

and unquantified) of the rule. 

(a) Quantified Compliance Costs 

The Commission quantifies the 

compliance costs for both industries 

utilizing assumptions about the number 

of hours required to determine and, if 

necessary, come into compliance with 

the final rule. The Commission expects 

that, in response to the final rule, firms 

will initially determine whether and 

how the rule applies to their current 

pricing and fee disclosure practices. The 

Commission assumes firms with current 

practices that align with the final rule 

will incur, at most, one hour of lawyer 

time to confirm compliance. This hour 

of lawyer time is a proxy for the average 

amount of time firms will need to 

determine whether the final rule applies 

to them. For example, some firms may 

not employ an attorney at all but may 

instead have a staff member review the 

rule. 

The Commission does not have data 

on the exact costs noncompliant firms 

will incur to comply with the final rule. 

Some firms already may have developed 

tools to comply with the rule because 

they operate in jurisdictions, such as 

California, with existing similar all-in 

pricing requirements. Coming into 

compliance with the rule should be 

relatively easy for these firms. For other 

firms, complying with the final rule may 

require additional time and costs. To 

capture both the variation and 

uncertainty of costs across the two 

industries, the analysis includes a series 

of low- and high-end assumptions about 

the number of hours required to comply 

with the rule.568 For example, the 

Commission’s analysis assumes that 

firms not presently compliant will 

employ a low end of five hours and a 

high end of ten hours of lawyer time to 

determine necessary steps to comply 

with the rule. While some firms may 

forgo legal advice, this range of lawyer 

time serves as a proxy for any costs 

associated with understanding and 

preparing to comply with the rule. 

The final rule’s requirement to 

display total price may lead to shifts in 

consumer demand and, consequently, 

market equilibria. In response, firms 

transitioning away from drip pricing 

may need to determine new optimal 

prices. The Commission’s analysis 

assumes that these price reoptimizations will require firms to incur 

a one-time, upfront cost of data scientist 

time to perform this work. The analysis 

assumes firms not presently compliant 

will employ a low-end of forty hours 

and a high-end of eighty hours of data 

scientist time. Similar to the use of 

lawyer hours in estimating compliance 

costs, this range of data scientist time 

serves as a proxy for any costs 

associated with adjusting pricing 

strategies in response to the rule.569

The Commission expects that the drip 

pricing employed by firms not presently 

compliant with the rule is, in many 

cases, manifested in online sales. In 

such cases, firms also will need to 

adjust advertised prices as well as 

purchase processes for online sales, and 

the analysis assumes these adjustments 

require firms to incur a one-time, 

upfront cost of web developer time. The 

analysis assumes firms not presently 

compliant will employ a low end of 

forty hours and a high end of eighty 

hours of web developer time to become 


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570The U.S. Department of Transportation also 

uses an assumption of 80 hours of time to 

reprogram flight quotation websites for the 

Enhancing Airline Passenger Protections II rule. 

U.S. Dep’t Transp., Preliminary Regulatory 

Analysis: Enhancing Airline Passenger Protections 

II (May 24, 2010), https://www.regulations.gov/ 

document/DOT-OST-2010-0140-0003 (‘‘Consumer 

Rule II’’). 

571U.S. Bureau Lab. Stat., Occupational 

Employment and Wage Statistics, May 2023 

National Occupational Employment and Wage 

Estimates United States (May 2023), https://

www.bls.gov/oes/current/oes_nat.htm (‘‘OEWS 

National’’); U.S. Bureau Lab. Stat., Occupational 

Employment and Wage Statistics, Occupational 

Employment and Wages, May 2023: 15–2051 Data 

Scientists (May 2023), https://www.bls.gov/oes/ 

current/oes152051.htm (‘‘OEWS Data Scientists’’) 

(providing the hourly wages for data scientists); 

U.S. Bureau Lab. Stat., Occupational Employment 

and Wage Statistics, Occupational Employment and 

Wages, May 20231: 15–1254 Web Developers (May 

2023), https://www.bls.gov/oes/current/ 

oes151254.htm (‘‘OEWS Web Developers’’) 

(providing the hourly wages for web developers); 

U.S. Bureau Lab. Stat., Occupational Employment 

and Wage Statistics, Occupational Employment and 

Wages, May 2023: 23–1011 Lawyers (May 2023), 

https://www.bls.gov/oes/current/oes231011.htm 

(‘‘OEWS Lawyers’’) (providing the hourly wages for 

lawyers). This assumption is valid if hours spent in 

compliance activities would otherwise be spent in 

other productive work-related activities, the social 

value of which is summarized by the employee’s 

wage. To the extent that these activities can be 

accomplished using time during which employees 

would otherwise be idle in the absence of a rule, 

our estimates will overstate the welfare costs of the 

final rule. 

compliant with the final rule.570 Once 

firms are compliant with the rule, any 

future changes to pricing displays or 

purchasing systems are not a direct 

consequence of the rule. Since the rule 

will not take effect for four months, 

some of these pricing display and 

advertising updates may come at no 

additional cost to certain firms. Many 

firms regularly update their pricing 

displays and advertisements. Any firms 

that would, in their normal course of 

business, update their displays and 

advertising during the four month 

window prior to the rule taking effect 

would not incur the additional one-time 

cost of updating their displays and 

advertisements in response to the rule. 

Because the Commission lacks data on 

these business practices, the 

Commission conservatively assumes 

that all firms not presently compliant 

with the rule will incur these costs. As 

such, the Commission’s analysis likely 

represents an overestimate of 

compliance costs. 

It may be the case that once the firm 

incurs the one-time transition costs, 

there are no additional costs. For a lowend estimate of costs, the Commission’s 

analysis assumes annual costs are $0 

because there are zero additional hours 

of labor. However, it may be the case 

that, as firms transition into compliance 

with the final rule, firms need to 

reevaluate their pricing policies to 

ensure continued compliance by 

employing additional lawyer time on an 

annual basis. Available data do not 

allow the Commission to estimate the 

exact annual compliance costs firms 

may incur as various industries adapt to 

the final rule. For the high-end cost 

estimate, the Commission’s analysis 

assumes firms require an average of ten 

hours of lawyer time for annual 

compliance checks. The Commission 

recognizes some firms may not utilize 

lawyer time but may delegate 

compliance to non-attorney employees 

and still incur annual compliance costs. 

Data on non-lawyer compliance costs 

are not available, and these potential 

annual compliance costs are proxied 

with lawyer time with the implicit 

assumption that non-attorney employee 

hourly wages are lower than lawyer 

wages. 

Table 3 presents the total compliance 

costs as the sum of the industry-specific 

compliance costs described in more 

detail in section V.E.3.c and V.E.3.d. 

The cost of employee time is monetized 

using wages obtained from the Bureau 

of Labor Statistics’ May 2023 National 

Occupational Employment and Wage 

Estimates for the live-event ticketing 

industry.571 For the short-term lodging 

industry, the analysis uses industryspecific wages associated with the North 

American Industry Classification 

System (‘‘NAICS’’) codes. 


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Table 4 presents the ten-year per-firm 

annualized compliance costs for the 

live-event ticketing and short-term 

lodging industries, separated by firms 

already in compliance, which incur a 

one-time compliance check, and firms 

not presently in compliance, which 

incur both one-time and recurring costs. 

Compliance costs for the short-term 

lodging industry are further 

disaggregated into costs for U.S. hotels 

and U.S. home share hosts. Costs to 

foreign hotels and home share hosts are 

discussed in section V.E.3.d.ii. 


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572 In section V.E.3.c and V.E.3.d, the 

Commission quantifies the final rule’s net social 

benefits for the live-event ticketing and short-term 

lodging industries. 

573For purposes of discounting and annualizing 

costs, the analysis assumes that firms incur onetime costs immediately, at the beginning of year 1, 

and potential costs of annual compliance checks at 

the end of each year. 

574Benefits to consumers, such as reductions in 

search costs, will accrue continually over time. For 

simplicity, the break-even analysis assumes that 

annualized benefits accrue all at once at the end of 

each year. As such, the break-even analysis may 

overestimate the benefits required to outweigh 

costs. 

575While total costs are higher with a smaller 

discount rate, annualized costs are higher with a 

larger discount rate due to higher upfront costs and 

lower recurring costs. 

576See OEWS National, supra note 571 

(providing the mean hourly wage); Hamermesh, 

(b) Break-Even Analysis 

To have a positive net benefit, the 

final rule’s benefits must outweigh its 

costs. The Commission calculates the 

break-even benefit per consumer based 

on the quantified costs presented in 

section V.E.3.b.572 That is, the 

Commission determines the minimum 

value the final rule would need to 

generate for the average consumer for its 

total benefits to outweigh its quantified 

costs. The rule’s benefits may include 

reduced search costs, reduced 

deadweight loss, and reduced 

psychological distress or frustration 

from surprise fees. For this analysis, the 

Commission considers costs in 

annualized terms—the average 

discounted cost of compliance per year 

over 10 years.573 As such, the analysis 

expresses the break-even benefit as an 

average benefit per consumer per year 

over ten years.574

From Table 3, under the assumption 

that firms and consumers discount 

future years at 3%, the Commission’s 

analysis estimates that the final rule 

may result in costs as high as $644 

million over 10 years. Assuming instead 

a discount rate of 7% for future years, 

the analysis estimates that the final rule 

may result in costs as high as $603 

million over ten years. To determine the 

break-even benefit, the Commission’s 

analysis begins with the total present 

value of total costs and calculates the 

annualized total costs across both 

industries.575 Next, the Commission 

calculates what the break-even benefit 

would be per consumer, according to 

the following formula: 

Per Consumer Annualized Benefits ≥ 

(Annualized Quantified 

Compliance Costs/Population) 

Table 5 presents the results of this 

break-even analysis. According to the 

2020 Census, there are 258,343,281 

adults living in the United States. Thus, 

the analysis divides the estimates of 

annualized costs by the number of U.S. 

adults to find the average consumer 

benefit per year for 10 years required to 

exceed quantified compliance costs. For 

example, if the final rule results in an 

average benefit to consumers that 

exceeds $0.33 per year over ten years, 

then the final rule’s benefits exceed its 

quantified compliance costs under the 

high-end assumption and an assumed 

7% discount rate. 

Table 5 also provides the break-even 

benefit per consumer in terms of 

minutes saved as a result of the final 

rule. According to the Bureau of Labor 

Statistics’ Occupational Employment 

Statistics, the average hourly wage of 

U.S. workers in 2023 was $31.48, and 

recent research suggests that individuals 

living in the U.S. value their non-work 

time at 82% of average hourly earnings. 

Thus, the value of non-work time for the 

average U.S. worker would be $25.81 

per hour.576 If the analysis divides the 


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supra note 533 (providing the value of consumer 

time). 

577Assuming a 3% discount rate and the highend assumptions, the break-even time saved per 

consumer per year would be 0.68 minutes. 

578See sources cited supra note 571, including 

OEWS National (providing the mean hourly wage); 

OEWS Data Scientists (providing the hourly wages 

for data scientists); OEWS Web Developers 

(providing the hourly wages for web developers); 

and OEWS Lawyers (providing the hourly wages for 

lawyers). 

579Wages are doubled in this sensitivity analysis, 

but the break-even benefit per consumer does not 

exactly double because not all costs depend on 

wages. One component of the cost calculation in the 

short-term lodging industry is the cost to home 

share hosts of re-optimizing prices. This cost is 

evaluated using an estimate of hosts’ hourly value 

of time rather than wages, which is not doubled. 

Therefore, the break-even benefits per consumer 

presented in Table 6 are slightly less than double 

those in Table 5. 

break-even dollar benefit per consumer, 

using the high-end assumptions and a 

discount rate of 7% ($0.33), by the value 

of saved search time ($25.81/hour) and 

converts to minutes, the break-even 

saved search time per consumer is 0.77 

minutes. That is, if the final rule results 

in savings from reduced search time that 

exceed 0.77 minutes per consumer per 

year over ten years, then the benefits 

solely from reduced search time will 

exceed quantified compliance costs.577

Although the Commission 

acknowledges that benefits of the final 

rule may vary across consumers, as 

some consumers may be more likely 

than others to consume live-event 

tickets and/or short-term lodging, the 

Commission finds it highly likely that 

consumers would experience average 

search time savings of this amount. 

There are a few important caveats to 

this break-even analysis. This analysis 

may overestimate the number of 

noncompliant firms in the live-event 

ticketing and short-term lodging 

industries. In that case, this assumption 

leads to an overestimate of both costs 

and necessary break-even benefits. On 

the other hand, there may be more firms 

not already in compliance with the final 

rule, in which case this assumption 

results in an underestimate of both costs 

and break-even benefits. 

The Commission cannot forecast all 

potential consequences and costs. This 

break-even analysis does not account for 

any unquantified benefits or costs due 

to unintended consequences. However, 

if the benefits from reduced deadweight 

loss caused by consumers’ incomplete 

price information, reduced search time, 

and beneficial unintended 

consequences outweigh the costs from 

compliance and harmful unintended 

consequences, then the rule results in 

positive net social benefits. The 

Commission believes benefits will 

exceed the costs. 

i. Sensitivity Analysis: Assume Higher 

Wage Rates 

The Commission received comments 

regarding the wage rates used in the cost 

estimation. To address these comments, 

this section provides the break-even 

analysis described in section V.E.3.b 

using rates that are double the average 

wage rate obtained from the Bureau of 

Labor Statistics May 2023 National 

Occupational Employment and Wage 

Estimates.578 Specifically, the wage 

rates used for this analysis are $169.68 

for lawyer time to review compliance, 

$114.46 for data scientist time to reoptimize pricing, and $91.90 for web 

developer time. Using these higher wage 

rates, the break-even benefit required to 

exceed quantified compliance costs is 

provided in Table 6.579


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580E.g., White House, How Junk Fees Distort 

Competition, supra note 551. 

581Michal Dalal, Online Event Ticket Sales in the 

US, IBIS World (May 2023) (‘‘Ticket Sales Industry 

Report’’). 

582 Id. 

583Numerous commenters from the live-event 

ticketing industry recognized the pervasiveness of 

various ticketing fees. See, e.g., FTC–2023–0064– 

3212 (TickPick, LLC observed the ‘‘widespread’’ 

deceptive practice of bait-and-switch pricing); FTC– 

2023–0064–3230 (Future of Music Coalition 

commented that they have worked to ‘‘deal[ ] with 

the scourge of junk fees in various parts of the 

economy,’’ including live touring); FTC–2023– 

0064–3105 (Charleston Symphony affirmed that 

‘‘requiring sellers to disclose the total price clearly 

and conspicuously[ ] addresses a pressing issue in 

the nonprofit performing arts sector’’). 

584U.S. Gov’t Accountability Office, Event Ticket 

Sales: Market Characteristics and Consumer 

Protection Issues, (Apr. 12, 2018), (‘‘GAO Report’’), 

https://www.gao.gov/products/gao-18-347. 

585See, e.g., White House, President Biden 

Recognizes Actions by Private Sector Ticketing and 

Travel Companies to Eliminate Hidden Junk Fees 

and Provide Millions of Customers with 

Transparent Pricing (Jun. 15, 2023) https://

www.whitehouse.gov/briefing-room/statementsreleases/2023/06/15/president-biden-recognizesactions-by-private-sector-ticketing-and-travelcompanies-to-eliminate-hidden-junk-fees-andprovide-millions-of-customers-with-transparentpricing/. Some ticket sellers, such as TickPick, LLC, 

have never used hidden fees; S. Comm. on 

Commerce, Sci., & Transp., TICKET Act, https://

www.commerce.senate.gov/services/files/ 

071401A3-D280-414C-AEDB-A9B57F276067. 

586FTC–2022–0069–6089 (ANPR) (National 

Association of Ticket Brokers); FTC–2022–0069– 

6079 (ANPR) (StubHub, Inc.). 

The break-even analysis under the 

assumption of doubled wages implies 

that if the final rule results in an average 

benefit to consumers that exceeds $0.59 

per year over ten years, then the final 

rule’s benefits exceed its quantified 

compliance costs under the high-end 

assumption and an assumed 7% 

discount rate. In terms of minutes saved 

per consumer, the high-end cost 

assumptions with doubled wages and a 

7% discount rate imply that if the final 

rule results in savings from reduced 

search time that exceed 1.36 minutes 

per consumer per year over ten years, 

then the benefits solely from reduced 

search time will exceed quantified 

compliance costs. 

(c) Quantified Benefits and Costs: LiveEvent Ticketing Industry 

This section analyzes the final rule’s 

quantified benefits and costs in the liveevent ticketing industry. Quantified 

benefits are limited to the expected 

reductions in search costs to consumers. 

Since there is an additional, 

unquantified benefit of reduced 

deadweight loss, which is discussed 

conceptually in section V.E.2.a.ii, the 

net benefit estimated in the following 

analysis is conservative. The 

Commission finds that the quantified 

benefits and costs indicate that the rule 

will have a positive net benefit, even 

without accounting for the unquantified 

benefit of reducing deadweight loss. 

Consumers in the live-event ticketing 

industry are often surprised by 

mandatory fees at the end of the 

purchase process.580 In 2022, online 

event ticket sales were reported to be 

$8.1 billion.581 Live events include 

concerts (30.3%), sporting events (33%), 

and dance, opera, and theater 

productions (12.4%).582 For many 

consumers, there are no close 

substitutes for the specific product that 

they wish to purchase: a ticket to attend 

a live event. Thus, when consumers are 

presented with surprise mandatory fees, 

the consumer either pays the full price 

including the fees, spends time 

searching for a new option such as a 

different seat or a different seller, or 

forgoes the purchase entirely. 

The live-event ticketing industry is 

unique relative to other industries 

because there is a large and robust 

secondary market. A given ticket to an 

event may be sold in the primary 

market, and then resold multiple times 

in the secondary market. It is difficult to 

fully quantify how many live-event 

ticket purchases are made in the U.S., 

how many involve mandatory fees, and 

the typical amount of the fee. Many liveevent ticket sellers appear to include 

some kind of fee, although the size and 

type of the fees vary across sellers.583 In 

a non-generalizable sample, the GAO 

found live-event ticketing fees in 

primary and secondary ticket markets 

averaged 27% and 31% of the ticket’s 

price, respectively.584

Following White House and 

Congressional calls for disclosure of 

hidden fees, and after the ANPR was 

announced, some ticket sellers pledged 

to show all-in prices when the 

consumer begins the purchase 

process.585 However, absent the final 

rule, market forces would likely return 

to the equilibrium of hidden mandatory 

fees. In fact, the National Association of 

Ticket Brokers and StubHub, Inc. 

submitted comments to the ANPR in 

support of a rule requiring all-in pricing, 

but commented that such a rule would 

only be effective if applied to all ticket 

sellers and rigorously enforced.586 As 

discussed in section III.B.1.b, the 


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587Blake, supra note 521. 

588Ticketmaster states that the amount of time it 

imposes varies by event but references a fiveminute purchasing period. FAQ’s: Why does 

Ticketmaster enforce a time limit when making 

purchases online?, Ticketmaster.com.au, https://

www.ticketmaster.com.au/h/faq.html. Based on a 

small, non-representative sample of ticket purchase 

attempts, StubHub appears to generally offer ten 

minutes to complete a ticket purchase. 

589See also Consumer Rule II, supra note 570, at 

39. The Preliminary Regulatory Impact Analysis for 

Consumer Rule II assumed airfare consumers would 

save five minutes of search and estimation time if 

all websites provided full-fare information upfront. 

590Live Nation Entm’t Inc., Annual Report (Form 

10–K) (Feb. 22, 2024) (‘‘Live Nation 10–K’’), https:// 

investors.livenationentertainment.com/sec-filings/ 

annual-reports/content/0001335258-24-000017/ 

0001335258-24-000017.pdf. 

591U.S. GDP in 2023 was estimated to be $27.36 

trillion and GDP for North America was estimated 

to be $31.4 trillion. IMF DataMapper United States 

Datasets, IMF.org, https://www.imf.org/external/ 

datamapper/profile/USA; IMF DataMapper North 

America Datasets, IMF.org, https://www.imf.org/ 

external/datamapper/profile/NMQ. The 

Commission’s analysis adjusts North American 

tickets (221 million) by 87% to estimate the number 

of tickets sold in the United States, resulting in 192 

million. 

592See Christine A. Varney, Assistant Attorney 

General, Antitrust Division, U.S. Dep’t of Justice, 

Remarks at the South by Southwest Conference: 

The TicketMaster/Live Nation Merger Review and 

Consent Decree in Perspective (Mar. 18, 2010), 

https://www.justice.gov/atr/speech/ticket

masterlive-nation-merger-review-and-consentdecree-perspective. 

593The Live Nation 10–K, supra note 590, does 

not separate out tickets sold by Ticketmaster in the 

primary versus secondary markets. Ticketmaster 

now sells tickets on the secondary market, which 

includes several other sellers such as StubHub, Inc., 

Vivid Seats, TickPick, LLC, Ace Ticket, Alliance 

Tickets, Coast to Coast Tickets, and others. 

Commission received similar comments 

in response to the NPRM emphasizing 

that the benefit of the rule requires 

industry-wide coverage so that no single 

seller is allowed to charge surprise fees 

at the end of the transaction. If any 

seller utilizes hidden fees, they may 

capture a larger market share by 

advertising lower initial prices. Absent 

a Federal rule applying to all sellers, 

competitive forces might drive ticket 

sellers to return to the use of hidden 

fees. Thus, the Commission’s analysis 

quantifies benefits and costs relative to 

the baseline equilibrium where sellers 

do not disclose total price upfront. 

In this final live-event ticketing net 

benefit analysis, the Commission 

updates firm counts, wage rates, any 

inflation-adjusted values, value of time, 

and 10–K live-event ticket revenue 

information to reflect the most recent 

available data. The Commission was 

unable to update any numbers from 

IBISWorld Reports. 

i. Live-Event Ticketing: Estimated 

Benefits of the Final Rule 

(a) Consumer Time Savings When 

Shopping for Live-Event Tickets 

The final rule requires disclosure of 

total price inclusive of all fees or 

charges that a consumer must pay in 

order to use the good or service for its 

intended purpose. Required disclosure 

of total price and prohibitions on 

misrepresentations save consumers time 

when shopping for a live-event ticket by 

requiring the provision of salient, 

material information upfront and 

eliminating time spent pursuing ticket 

offers priced above the amount the 

consumer is willing to spend, also 

known as the consumer’s reservation 

price. 

The Commission’s analysis assumes 

that, as a result of the rule, the total time 

spent by a consumer conducting the 

transaction will decrease, because some 

consumers will reduce the number of 

ticket listings they view prior to making 

a ticket purchase. For example, the 

Blake Study examined an experiment on 

StubHub where fees were presented 

upfront to some consumers and at the 

end of the purchase to others.587 The 

experiment found that the percentage of 

consumers who only view one listing is 

74% when fees are presented at the end 

of the transaction versus 83% when fees 

are presented upfront. Using the 

distribution of listings viewed by 

consumers as reported in the Blake 

Study, the analysis calculates that the 

reduction in the average number of 

listings a consumer views when fees are 

displayed upfront is 0.1525 listings. 

To calculate the reduction in 

consumer search time resulting from 

upfront pricing, the Commission 

requires information on the length of 

time a consumer spends viewing a 

single listing. The Commission is not 

aware of any data available on this. 

However, many ticket sellers utilize a 

‘‘countdown clock’’ where the selected 

tickets in the consumer’s shopping cart 

expire and are returned to the 

marketplace. During this countdown 

clock, a consumer who was unhappy 

with the revealed total price could 

search for another ticket without losing 

the original ticket. The Commission 

uses this range of countdown clock time 

as a proxy for a low-end and high-end 

estimate of the time spent viewing a 

listing. These countdown clocks range 

from five to ten minutes per ticket 

transaction.588 Multiplying the assumed 

length of a ticket transaction of five or 

ten minutes by the estimated reduction 

in viewed listings from the Blake Study 

results in a search time savings of 

0.7625 to 1.525 minutes per consumer 

transaction.589

Next, the Commission’s analysis 

estimates the number of consumer 

purchases of live-event tickets. Live 

Nation (which owns Ticketmaster) 

reported selling over 329 million feebearing tickets in the primary and 

secondary markets using the 

Ticketmaster system in its 2023 10–K 

SEC filing.590 However, this figure 

combines North American and 

international ticket sales. Live Nation 

also reported that slightly more than 

two-thirds of concert events were in 

North America, so the analysis applies 

that proportion to the total combined 

ticket sales and assumes that 

Ticketmaster sold more than 221 

million tickets in North America. To 

estimate the number of tickets sold 

solely in the U.S., the analysis then also 

adjusts the number of tickets by the 

share of North American GDP 

attributable to the U.S. (0.87 in 2023), 

which results in an estimated 192 

million tickets sold in the primary and 

secondary markets by Ticketmaster in 

the U.S.591

To find the total number of tickets 

sold in the U.S. by all live-event ticket 

sellers, the Commission’s analysis 

extrapolates from Ticketmaster’s ticket 

sales using its market share. However, 

Ticketmaster’s market share is 

uncertain. In 2010, the Department of 

Justice found that Ticketmaster had 

maintained a market share of more than 

80% for the previous fifteen years.592 If 

the Commission’s analysis assumes that 

Ticketmaster still has an 80% share of 

the live-event ticket market (which 

includes both primary and secondary 

ticket markets), it can estimate the total 

number of tickets sold in the U.S. by 

dividing Ticketmaster’s ticket sales in 

the U.S. by 80%. This provides a lowend estimate of the number of tickets 

sold in the U.S. of 240 million tickets. 

However, Ticketmaster did not begin 

selling in the secondary market until 

after it merged with Live Nation. Based 

on publicly available information, the 

Commission is uncertain of 

Ticketmaster’s market share in the 

secondary market for tickets.593 If 

Ticketmaster does not have 80% of the 

ticket market (both primary and 

secondary), the number of tickets sold 

in the U.S. would exceed the low-end 

estimate of 240 million tickets. To 

generate a high-end estimate of the total 

number of tickets sold in the U.S., the 

Commission’s analysis uses the reported 

revenue for the full online ticket sales 

industry provided by the private 

research firm IBISWorld and calculates 

Ticketmaster’s revenue share of the 

industry. IBISWorld reports the online 

ticket sales industry, including both 

primary ticket sellers and ticket 


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594See https://www.ibisworld.com/industrystatistics/market-size/online-event-ticket-salesunited-states/. 595Assuming Ticketmaster’s market share is 

equivalent to its revenue share (of the primary and 

secondary markets) also assumes that the average 

price of a ticket sold by Ticketmaster is the same 

as (or lower than) the average price of a ticket sold 

by the rest of the industry. If, however, the average 

price of a ticket sold by Ticketmaster is higher than 

average prices in the rest of the industry, then 

Ticketmaster’s revenue share is higher than its 

ticket share, and the extrapolation understates the 

total number of tickets sold in the U.S. 

596The Commission does not currently have 

information on the average number of tickets 

purchased in a transaction. However, there is 

reason to believe the average would be greater than 

one because most venues limit the number of 

tickets that can be purchased in a given transaction, 

suggesting that there is consumer demand for 

purchases of more than a single ticket. The limit is 

dependent on the event. Ticketmaster, Why is there 

a ticket limit?, https://help.ticketmaster.com/hc/enus/articles/9781245025937-Why-is-there-a-ticketlimit. 

resellers, earned $12.5 billion in 

revenue in 2023.594 The Live Nation 10– 

K reported ticketing revenue of $3 

billion in 2023, which suggests that 

Ticketmaster has a 24% revenue share 

of the online ticketing industry.595 The 

Commission’s analysis extrapolates a 

high-end estimate of the total number of 

tickets sold in the U.S. by dividing 

Ticketmaster ticket sales in the U.S. by 

24%, which results in an estimate of 

801 million live-event tickets sold in the 

U.S. 

Lastly, the reduction in search time of 

0.7625 to 1.525 minutes is per consumer 

purchase, not per ticket purchase. The 

Commission’s analysis assumes that the 

average consumer purchase is between 

1.5 and 3 tickets.596 Thus, the total 

number of tickets sold is divided by 1.5 

or 3 to arrive at an estimated range for 

the number of consumer purchases. The 

analysis estimates the range of live 

event consumer purchases in the U.S. to 

be 80 million on the low end and 534 

million on the high end. 

When multiplied by the number of 

transactions per year, the reduction in 

minutes spent viewing ticket listings 

will generate a total time savings of 1.02 

million to 13.6 million hours per year. 

Using the value of non-work time for the 

average U.S. worker of $25.81 per hour, 

the Commission’s analysis estimates 

that the total benefit from time savings 

for completed transactions is roughly 

$26.3 million to $350.6 million per year, 

depending on how conservative its 

assumptions are. Table 7 presents the 

expected benefits of time savings over 

the next ten years in present value. 

BILLING CODE 6750–01–P 


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597Live Nation 10–K, supra note 590. 598OEWS National, supra note 571; Hamermesh, 

supra note 533. 599Blake, supra note 521. Live-event tickets are 

an example of a differentiated product; there are 

higher quality tickets (e.g., better views, more 

comfortable seats, cover from the elements) that are 

associated with higher price tiers. Blake et al. find 

that consumers who face drip pricing purchase 

more expensive, higher quality tickets than they 

would if provided with upfront pricing. 

BILLING CODE 6750–01–C 

(b) Additional Unquantified Benefits: 

Reductions in Deadweight Loss and 

Abandoned Transactions 

Due to the incomplete price 

information problem described in 

section V.E.1, the final rule requiring 

ticket sellers to show total price of 

tickets upfront will likely result in a 

reduction of deadweight loss. Recent 

research suggests that when consumers 

know total prices for tickets upfront, 

consumers are better able to find the 

tickets that match their desired quantity 

and quality (seat type or location).599

The analysis does not quantify the 

reduction in deadweight loss, but such 

a reduction is a positive benefit of the 

rule. 

Another unquantified benefit to the 

final rule is a potential decrease in 

abandoned transactions. For example, in 

some cases, once the additional 

information impacting full price is 

revealed, consumers may fully abandon 

the transaction (i.e., not purchase any 

ticket). Although the Commission 

solicited comment in the NPRM on the 


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600OEWS National, supra note 571. 601NAICS code 561599 ‘‘comprises 

establishments (except travel agencies, tour 

operators, and convention and visitors bureaus) 

primarily engaged in providing travel arrangement 

and reservation services.’’ U.S. Census Bureau, 

North American Industry Classification System, 

561599 All Other Travel Arrangement and 

Reservation Services (2022), https://

www.census.gov/naics/?input=561599&year=

2022&details=561599. 

602U.S. Census Bureau, 2021 SUSB Annual 

Datasets by Establishment Industry (Dec. 2023), 

https://www.census.gov/data/datasets/2021/econ/ 

susb/2021-susb.html. 

603 Id. 

604Note that some live-event ticket sellers may be 

organized as non-profit entities and thus could fall 

outside of the Commission’s jurisdiction. The 

Commission did not find data on the proportion of 

ticket sellers that are non-profits and thus uses the 

full number of firms. If a non-trivial number of 

ticket sellers are outside the jurisdiction of the 

Commission and not subject to the provisions of the 

rule, then the total costs to ticket sellers is 

overestimated. 

605Ticket Sales Industry Report, supra note 581. 

606FTC–2023–0064–3212 (TickPick, LLC 

commented: ‘‘For the most part, ticketing 

marketplaces would incur an immaterial cost to 

implement all-in pricing. Internationally, major 

ticket marketplaces are already required to comply 

with true all-in pricing in Canada and the United 

Kingdom. The technology to display tickets 

inclusive of fees in the form of a toggle is a widely 

available functionality. Put differently, the 

technology already exists within ticketing platforms 

to eliminate drip pricing and would simply need to 

be applied to events in the U.S.’’). 

607FTC–2023–0064–3122 (Vivid Seats 

commented: ‘‘We believe that the FTC is 

underestimating the amount of employee time 

required by at least a factor of five.’’). The 

Commission notes that other commenters stated the 

transition to upfront pricing for ticket sellers would 

be as simple as a toggle switch and that most ticket 

sellers already have the capability to provide Total 

Price due to existing regulations in other countries. 

See, e.g., FTC–2023–0064–3212 (TickPick, LLC); 

FTC–2023–0064–0132 (Individual Commenter who 

purchased tickets from GameStop and StubHub 

noted that ‘‘on all of these sites the fees are not 

explained until the final page unless you go find the 

toggle to include fees as you are looking for 

tickets’’); FTC–2023–0064–3207 (Consumer Reports 

noted a consumer who commented: ‘‘While I 

appreciate that TM [Ticketmaster] now has the 

option to view all your fees up front as part of the 

price if you toggle that option, its totally insane that 

fees can be 25% of the cost at LEAST.’’); FTC– 

2022–0069–6162 (ANPR) (Recording Academy 

noted that ‘‘StubHub allows the consumer to toggle 

‘Show prices with estimated fees’ filter during the 

ticket search’’). The Commission did not receive 

any definitive data on the number of hours this 

change would take and thus retains the low-end 

and high-end hours estimates presented in the 

NPRM. 

frequency of, and the reasons for, 

abandoned transactions in the live-event 

ticket market to help quantify this 

benefit, it did not receive this data and 

cannot determine the quantity of such 

abandoned transactions and the amount 

of time spent pursuing them. As a 

result, this benefit is unquantified. 

ii. Live-Event Ticketing: Estimated Costs 

of the Final Rule 

This section describes the potential 

costs of the final rule’s provisions and 

provides quantitative estimates where 

possible. For live-event ticketing, the 

cost of employee time is again 

monetized using wages obtained from 

the Bureau of Labor Statistics’ May 2023 

National Occupational Employment and 

Wage Estimates.600 Because live-event 

ticketing is not associated with a 

specific NAICS code, the Commission 

uses wages at the national level rather 

than the industry-specific wages that are 

used to calculate costs for the short-term 

lodging industry. 

The costs to sellers from the rule 

include a review of whether the rule 

applies, and, if the firm is not currently 

compliant with the rule, one-time costs 

to comply with the rule, as well as 

recurring annual costs to review and 

ensure ongoing compliance. The 

Commission’s analysis presents two cost 

scenarios corresponding to different 

assumptions of how many hours are 

required to comply with the rule and 

how many firms would be affected by 

the rule. The analysis presents these as 

low-end and high-end cost scenarios. 

To estimate costs for the entire liveevent ticket-selling industry, the 

Commission’s analysis calculates the 

cost per seller and multiplies that by the 

number of sellers in the industry. There 

is some uncertainty about the number of 

live-event ticket sellers that would be 

affected by the rule because, while the 

NAICS classification system does not 

define a classification solely for ticket 

sellers, two different NAICS codes 

might include ticket sellers. The GAO 

Report used the NAICS code 561599, 

which is ‘‘All Other Travel Arrangement 

and Reservation Services.’’ 601 This 

NAICS category includes 1,442 firms; 

some live-event ticket sellers, such as 

Tickets.com and Vivid Seats, use this 

classification.602 Other live-event ticket 

sellers, such as Ticketmaster and 

StubHub, however, are classified as 

NAICS code 7113, which is ‘‘Promoters 

of Performing Arts, Sports, and Similar 

Events,’’ and includes 7,998 firms.603 As 

a high-end estimate of the number of 

live-event ticket sellers, the 

Commission’s analysis uses the sum of 

the firms within these two NAICS code 

and assumes there are 9,440 firms 

potentially impacted by the final 

rule.604

The 9,440 figure is potentially overinclusive, as many firms within NAICS 

code 561599 and 7113 do not directly 

sell tickets or charge mandatory fees, 

and thus would not be impacted by the 

final rule. The private research firm 

IBISWorld estimated that the number of 

firms in the online live-event ticket 

selling industry was 3,326.605 The 

Commission’s analysis uses the 3,326 

figure as a low-end estimate of the 

number of firms. 

Next, the Commission’s analysis 

estimates the number of hours a firm 

would spend complying with the rule. 

As with assumptions regarding the 

number of firms, the following 

estimation utilizes low-end and highend values for the number of hours 

necessary for compliance. Because 

many ticket sellers operate in other 

countries that currently have 

requirements similar to the final rule 

(Canada, Australia, the United 

Kingdom, and the European Union 

member states), ticket sellers already 

may have incorporated any changes 

required by the final rule to their 

operating practices. The websites 

already may be programmed; the 

lawyers already may be prepared to 

advise on compliance with the rule; and 

the data scientists already may have 

determined the optimal pricing strategy. 

Thus, sellers would have relatively low 

costs to transition to all-in pricing in the 

U.S.606

In this low-end cost scenario, because 

live-event ticket sellers already are 

prepared to advertise total prices to 

consumers, the one-time, upfront cost of 

determining optimal prices and 

updating the purchase systems in terms 

of the number of required hours is 

negligible. The Commission’s analysis 

assumes five hours of lawyer time to 

determine if the rule applies, forty hours 

of data scientist time to re-optimize 

pricing strategy, and forty hours of web 

developer time to edit and reprogram 

the website to display upfront prices. 

For the low-end cost scenario, the 

analysis also assumes there are no 

annual costs after the firm has incurred 

the one-time transition costs. 

In the high-end cost scenario, the 

Commission’s analysis assumes that 

ticket sellers have not laid the 

groundwork to comply with the rule. 

The high-end cost scenario assumes 

sellers require twice the number of 

hours to determine optimal prices, reprogram the website to include total 

price, and review and confirm 

compliance. Thus, the one-time costs 

include 10 hours of lawyer time, 80 

hours of data scientist time, and eighty 

hours of web developer time. For the 

high-end cost estimate, the analysis 

assumes there are recurring annual costs 

of ten hours of lawyer time per year to 

review and confirm compliance.607

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608U.S. Census Bureau, 2021 SUSB Annual 

Datasets by Establishment Industry, supra note 602. 

Hourly wages are from the Bureau of Labor 

Statistics. See sources cited supra note 571, 

including OEWS Data Scientists (providing the 

hourly wages for data scientists); OEWS Web 

Developers (providing the hourly wages for web 

developers); and OEWS Lawyers (providing the 

hourly wages for lawyers). 

iii. Live-Event Ticketing: Net Benefits 

In Table 9, the Commission’s analysis 

presents net benefits using the 

quantified benefits and costs discussed 

in section V.E.3.c.i and V.E.3.c.ii. To 

calculate the low-end of the range for 

net benefits, the analysis subtracts the 

total quantified costs using the high-end 

cost assumptions from the total 

quantified benefits using the low-end 

benefit assumptions. For the high-end of 

the range for net benefits, the analysis 

subtracts the low-end estimate of total 

quantified costs from the high-end 

estimate of total quantified benefits. 


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Using various assumptions, the 

quantified benefits and costs imply that 

the rule will have a positive net benefit, 

even without accounting for the 

additional benefit of reducing 

deadweight loss. 

iv. Live-Event Ticketing: Uncertainties 

The Commission’s ability to precisely 

estimate benefits and costs is limited 

due to uncertainties in key parameters. 

The quantified benefits and costs for the 

live-event ticketing industry rely on a 

set of assumptions, based on the best 

available public information. When the 

data are unclear, the analysis relies on 

assumptions that generate a range of 

low-end and high-end estimates. In 

Table 10, the analysis summarizes those 

key assumptions and their effect on the 

resulting estimate of quantified benefits 

and costs. 

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609Throughout this section, we use ‘‘hotel’’ as an 

umbrella term for hotels, motels, inns, short-term 

rentals, vacation rentals, traditional bed and 

breakfasts, hostels, and other places of lodging. 

610Shelanski, supra note 550. 

611Mary Sullivan, Fed. Trade Comm’n, Economic 

Analysis of Hotel Resort Fees 4 (2017), https://

www.ftc.gov/system/files/documents/reports/ 

economic-analysis-hotel-resort-fees/p115503_hotel_

resort_fees_economic_issues_paper.pdf. 

612FTC–2023–0064–3094 (American Hotel & 

Lodging Association); Bjorn Hanson, U.S. Lodging 

Industry Fees and Surcharges Forecast to Increase 

to a New Record Level in 2018—$2.93 Billion, and 

Another Record Anticipated for 2019—the Newest 

Emerging Category is ‘‘Resort Fees’’ for Urban 

Luxury and Full Service Hotels (Aug. 27, 2018), 

https://bjornhansonhospitality.com/fees-%26- 

surcharges. 

613Sally French & Sam Kemmis, How to Avoid 

Hotel Resort Fees (and Which Brands Are the 

Worst), NerdWallet (updated Aug. 1, 2024, 11:53 

a.m. PDT), https://www.nerdwallet.com/article/ 

travel/hotel-resort-fees. 

614 In this final short-term lodging net benefit 

analysis, the Commission updates firm counts, 

wage rates, any inflation-adjusted values, value of 

time, and 10–K hotel revenue information to reflect 

the most recent available data. The Commission 

was unable to update any numbers from IBISWorld 

Reports. 

615The drip pricing literature suggests that, 

because time to view one listing is lower under 

upfront pricing, a subset of consumers may view 

more listings rather than fewer because the cost of 

viewing an additional listing has decreased. 

Sullivan, supra note 611. It is unclear how this 

affects total search time. If the higher number of 

listings viewed is offset by the lower time it takes 

to view each listing, the total search time will be 

lower under upfront pricing for this subset of 

consumers. If total time increases, it can be 

classified as ‘‘good’’ search time for this subset of 

consumers because it results in consumers 

purchasing their preferred hotel room. 

Alternatively, another group of consumers could 

view fewer listings because upfront prices allow 

consumers to compare rooms more easily and select 

their preferred hotel room more quickly. Blake, 

supra note 521. The total search time for these 

consumers will decrease. The Commission’s 

analysis focuses on the latter group of consumers 

because the change in their search time represents 

a decrease in ‘‘bad’’ or unnecessary searches caused 

by drip pricing. 

616FTC–2023–0064–3094 (American Hotel & 

Lodging Association). 

617Chris Anderson & Saram Han, The Billboard 

Effect: Still Alive and Well, 17 Cornell Hosp. Rpt. 

1 (2017), https://hdl.handle.net/1813/70982. The 

Commission calculates the average number of 

websites visited by summing the average number of 

(d) Quantified Benefits and Costs: ShortTerm Lodging Industry 

Businesses in the short-term lodging 

industry, which include both traditional 

hotels 609 as well as home share options 

like Airbnb and VRBO, often charge a 

variety of mandatory add-on fees. These 

fees are typically either disclosed 

upfront but separately from the base 

price (a practice known as partitioned 

pricing), or revealed just before 

payment, after the consumer has clicked 

through multiple pages of a listing (a 

practice known as drip pricing). 

Sometimes, these fees are not disclosed 

at all or are disclosed only when a 

consumer checks out at the conclusion 

of their stay. These fees may include 

mandatory surcharges referred to by 

hotels as ‘‘resort fees,’’ ‘‘amenity fees,’’ 

or ‘‘destination fees.’’ Hotels often 

justify charging these fees as necessary 

to cover the costs of amenities that are 

not reflected in the base rate, such as 

Wi-Fi, pool and gym access, towels, 

parking, or shuttle services. Home share 

websites like Airbnb and VRBO may 

include mandatory fees such as 

‘‘cleaning fees,’’ ‘‘service fees,’’ or ‘‘host 

fees.’’ These fees are mandatory and do 

not depend on the consumer’s use of the 

amenities or services. 

Consumer behavior studies have 

shown that both partitioned pricing and 

drip pricing cause consumers to 

underestimate the full price of the 

product, even when all components of 

the price are disclosed upfront.610 As a 

result, disclosing mandatory surcharges 

separately from the room rate without 

more prominently disclosing total price 

is likely to harm consumers by 

increasing search costs and reducing 

consumer surplus.611 These fees may 

reduce consumer surplus if consumers 

respond by booking a room that is more 

expensive than the room they would 

have chosen under upfront total pricing. 

Partitioned pricing and drip pricing may 

also increase search costs if consumers 

spend more time looking at additional 

listings in search of a cheaper hotel. 

One industry group states that 6% of 

U.S. hotels charge mandatory fees, 

which amounts to over $2.5 billion paid 

in resort fees annually by U.S. 

consumers.612 This number 

underestimates how much U.S. 

consumers pay in mandatory fees 

because it does not include fees from 

finding accommodations on the home 

share market through websites like 

Airbnb and VRBO, or fees incurred from 

booking at foreign hotels with U.S.- 

facing websites. Resort fees in the U.S. 

average 3.9% of the per-night cost of a 

room, and can exceed 20% of the pernight cost, especially at lower cost 

hotels.613

This section analyzes the final rule’s 

quantified benefits and costs in the 

short-term lodging industry. Quantified 

benefits are limited to the expected 

reductions in search costs to consumers. 

Since there is an additional, 

unquantified benefit of reduced 

deadweight loss, which is discussed 

conceptually in section V.E.2.a.ii, the 

net benefit estimated in the following 

analysis is conservative. The 

Commission finds that the quantified 

benefits and costs indicate that the rule 

will have a positive net benefit, even 

without accounting for the unquantified 

benefit of reducing deadweight loss.614

i. Short-Term Lodging: Estimated 

Benefits of the Final Rule 

As a result of the final rule, the 

Commission expects that the time 

consumers spend searching for shortterm lodging will decrease because 

prices will be easier to compare within 

and across websites. Some consumers 

will reduce the number of short-term 

lodging listings they view prior to 

booking or spend less time 

understanding and assessing the full 

price.615 In its analysis, the Commission 

makes the conservative and simpler 

assumption that the time spent viewing 

a listing remains the same, and that 

consumers reduce the number of listings 

they view. Table 11 quantifies the 

benefits of such time savings and 

provides low- and high-end estimates to 

account for uncertainty in the available 

statistics. 

The Commission’s analysis focuses on 

the benefits that accrue to consumers 

who book rooms from within the United 

States on any U.S.-facing website, which 

can include bookings at both domestic 

and foreign short-term lodgings. Shortterm lodgings include both traditional 

hotels as well as rooms booked through 

home share websites like Airbnb and 

VRBO. In this section, the Commission 

outlines how it calculates the benefits 

listed in Table 11 as well as the 

assumptions made. The table reports a 

set of basic search statistics used in the 

calculation, the savings per year for 

consumers who book at U.S. short-term 

lodgings, the savings per year for 

consumers who book at foreign shortterm lodgings with U.S.-facing websites, 

and the combined total savings for all 

U.S. consumers per year. 

Although not all short-term lodgings 

charge resort fees, the lack of a unified 

standard of upfront pricing across 

listings makes comparing prices 

difficult and time consuming for 

consumers. Even a single short-term 

lodging website can vary in whether 

listings have hidden fees. Different hotel 

brands belonging to the same larger 

hotel company may impose hidden fees 

for listings in some cities but not in 

others. Some listings may note whether 

resort fees are included in the base 

price, but in very fine print under the 

listed price. Some listings may not say 

anything, requiring consumers to click 

through the listing to learn whether 

there are hidden fees at the end of the 

booking process. Given that a minimum 

of 6% of hotels 616 impose drip or 

partitioned pricing, and the average 

hotel shopper visits seventeen travel 

websites before booking,617 consumers 


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OTAs, Hotel Sites, TripAdvisor, and Other Meta 

websites visited sixty days prior to reserving a 

room. 

618Andrey Fradkin, Search, Matching, and the 

Role of Digital Marketplace Design in Enabling 

Trade: Evidence from Airbnb (MIT Initiative on the 

Digit. Econ., Working Paper, 2017), https://

ide.mit.edu/wp-content/uploads/2017/07/Search

MatchingEfficiency.pdf. 

619 Yuxin Chen & Song Yao, Sequential Search 

with Refinement: Model and Application with 

Click-Stream Data, 63 Mgmt. Sci. 4345 (2016), 

https://doi.org/10.1287/mnsc.2016.2557. 

620Blake, supra note 521. 

621Although the Commission is basing its 

estimate about reduction in listings on data that 

comes from the ticketing industry, this method 

results in the most conservative reduction of 

viewed listings compared to other methods. The 

most relevant study from the hotel search cost 

literature estimates that improvements in hotel 

rankings (which may be loosely comparable to 

removing drip pricing) reduces search costs by 

$11.50. See Raluca M. Ursu, The Power of Rankings: 

Quantifying the Effect of Rankings on Online 

Consumer Search and Purchase Decisions, 37 Mktg. 

Sci. 530 (2018), https://doi.org/10.1287/ 

mksc.2017.1072. Given the Commission’s estimates 

of the time to view one listing (between 9.48 and 

14.18 minutes), this suggests an average reduction 

of between 2.95 and 1.95 listings viewed, which is 

implausible given that various papers find the 

average number of listings viewed at baseline to be 

between 2 and 3. Thus, while some papers find 

substantially higher search costs than the 

Commission’s method, these findings reinforce that, 

if anything, the benefits estimates presented here 

are likely conservative. 

622See Anderson & Han, supra note 800. It is 

unclear whether the relationship between websites 

viewed and time saved is linear, as consumers may 

save less time on the fifteenth website they view 

than they do on the first. As such, it is difficult to 

extrapolate from the Commission’s estimates to the 

total time saved for consumers who view multiple 

websites. Therefore, to remain conservative in its 

estimate of benefits, the Commission’s analysis 

assumes that consumers visit only one website. 

623Revenue equals about $192.23 billion. Alexia 

Moreno Zambrano, Hotels & Motels in the US, 

IBISWorld (Jan. 2023) (‘‘Hotels & Motels Industry 

Report’’); Thi Le, Bed & Breakfast & Hostel 

Accommodations in the US, IBISWorld (Jan. 2023) 

(‘‘Bed & Breakfast Industry Report’’). The ADR is 

about $149. STR: U.S. hotel ADR and RevPAR 

reached record highs in 2022, STR (Jan. 20, 2023), 

https://str.com/press-release/str-us-hotel-adr-andrevpar-reached-record-highs-2022. 

624Consumers book on average 1.8 nights per 

booking. Jordan Hollander, 75+ Hospitality 

Statistics You Should Know (2024), Hotel Tech 

Report (updated July 9, 2024), https://hoteltech

report.com/news/hospitality-statistics. 

625How much do U.S. hotels depend on 

international guest stays?, CBRE Econometric 

Advisors’ Blog (Oct. 10, 2017), https://www.cbreea.com/public-home/deconstructing-cre/2017/10/ 

10/how-much-do-u.s.-hotels-depend-oninternational-guest-stays. 

626Adrian, U.S. Travel & Tourism Statistics 2020– 

2021, Tourism Academy Blog (Sep. 15, 2021 

12:39:18 p.m.), https://blog.tourismacademy.org/ustourism-travel-statistics-2020–2021. 

are likely to encounter at least one 

website that imposes dripped or 

partitioned pricing in their search for a 

hotel. Even if consumers complete their 

whole search and booking process 

without visiting any websites that 

impose hidden resort fees, the fact that 

there could be hidden fees creates 

uncertainty and may cause consumers 

to click through more listings than they 

otherwise would have to learn if the 

initial price is truly the final price. 

Therefore, the Commission quantifies 

the benefits for all U.S. consumers who 

book a room in a given year, regardless 

of whether they interacted with a 

website that imposed dripped or 

partitioned pricing. 

(a) Search Statistics 

The Commission uses two different 

studies to calculate low- and high-end 

estimates for the average number of 

minutes it takes to view one listing. On 

the low end, the analysis uses statistics 

on Airbnb user search behavior 

collected by Fradkin (2017) to calculate 

that consumers spend 9.48 minutes to 

view one listing.618 On the high end, the 

analysis uses a hotel search cost model 

developed by Chen and Yao (2016) to 

calculate the average search cost per 

listing.619 Using this average search 

cost, the Commission estimates that 

consumers spend 14.18 minutes 

viewing one listing. Appendix B in 

section V.E.7 contains calculation 

details for both estimates. Using the 

estimates from each study as low- and 

high-end estimates ensures that the 

analysis captures user search behavior 

when shopping on home share websites 

like Airbnb and when shopping for a 

traditional hotel. 

To estimate the reduction in average 

listings viewed due to dripped or 

partitioned pricing, the Commission’s 

analysis uses results on the average 

reduction in listings viewed under 

upfront pricing from an experiment in 

the live-event ticket industry.620 That 

study found that the average reduction 

in listings viewed under upfront pricing 

was 10.6% of the mean listings viewed 

under drip pricing. For the low-end 

estimate, the analysis applies the same 

proportion to the mean listings viewed 

by Airbnb users in Fradkin (2017) (2.367 

listings, proxied by number of contacts) 

and finds a reduction of 0.25 listings. 

On the high end, the Commission 

applies this to the mean listings viewed 

by hotel searchers in Chen and Yao 

(2016), 2.3 listings, and finds a 

reduction of 0.24 listings.621

Multiplying these numbers by the 

minutes to view one listing results in 

2.39 to 3.47 minutes saved per 

transaction. These are likely 

conservative estimates, given that they 

assume consumers only view one 

website before booking a room. As 

previously stated, one study suggested 

that consumers visit an average of 

seventeen websites before booking.622

The average reduction in listings viewed 

may also underestimate benefits from 

eliminating dripped and partitioned 

pricing because it is more difficult to 

adapt to the wide variability of fees in 

the short-term lodging industry than it 

is in the live-event ticketing industry, 

where listings have the same percentage 

fee. Short-term lodgings have different 

fees, and the number of lodgings with 

such fees will vary across markets. 

Finally, as is described in detail in 

section V.E.3.b, the Commission’s 

analysis uses $25.81 as the value of one 

hour work time. 

(b) U.S. Hotels and Home Shares 

Next, the Commission calculates the 

total savings per year for U.S. 

consumers who book at U.S. short-term 

lodgings, which includes both U.S. 

hotels and home shares. The 

Commission’s analysis finds the total 

number of nights booked in the U.S. in 

2022 by dividing the total revenue the 

U.S. short-term lodgings industry 

earned from rooms by the average daily 

rate (‘‘ADR’’).623 The ADR is the average 

revenue per room-night booked in the 

U.S. The total number of nights booked 

in the U.S. in 2022 that would 

potentially be affected by this rule is 

about 1.29 billion. 

Dividing the total number of nights 

booked by the average number of nights 

per booking gives 715 million total 

bookings.624 About 91.8%, or 657 

million, of these bookings are made by 

U.S. consumers.625 Finally, the 

Commission calculates the total savings 

for U.S. consumers per year by 

multiplying the number of bookings 

made by U.S. consumers by the minutes 

saved per transaction and the value of 

time for consumers. This results in total 

savings ranging from about $674 million 

to $980.3 million. 

(c) Foreign Hotels and Home Shares 

with U.S.-Facing websites 

To estimate the number of foreign 

short-term lodging bookings made by 

U.S. consumers, the Commission uses 

the fact that 96% of all trips taken by 

U.S. consumers are domestic.626

Multiplying the number of bookings 

made by U.S. consumers by ((1¥0.96)/ 

0.96)) gives 27.4 million foreign 

bookings. The total savings for this 

category ranges from about $28.1 to 

$40.8 million. 

(d) All Hotels and Home Shares 

Together, U.S. and foreign bookings 

amount to about 683.9 million bookings 

per year. This corresponds to between 

27.2 and 39.6 million hours saved by 

U.S. consumers per year, and between 


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627OEWS National, supra note 571; Hamermesh, 

supra note 533. 

628Hollander, supra note 624. 

$702.1 million and $1.02 billion total 

savings per year. Table 11 presents the 

expected benefits of time savings over 

the next ten years in present value. 

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629U.S. Bureau Lab. Stat., Occupational 

Employment and Wage Statistics, May 2023 

National Industry-Specific Occupational 

Employment and Wage Estimates: NAICS 721100— 

Traveler Accommodation (May 2023), https://

www.bls.gov/oes/current/naics4_721100.htm 

(‘‘OEWS Traveler Accommodation’’). 

630NAICS code 721100 does not capture 

intermediary travel websites, which display pricing 

information and offer booking options for various 

short-term lodging firms. Because these 

intermediaries constantly update pricing 

information obtained directly from short-term 

lodging firms (see, e.g., FTC–2023–0064–3293, 

Travel Technology Association), and do not need to 

reoptimize prices or drastically change displays 

themselves, the Commission believes that 

intermediary firms will not face additional 

compliance costs from the rule. 

631The Commission’s analysis includes costs to 

foreign hotels with U.S.-facing websites because 

complying with the rule may cause them to pass 

through some costs to U.S. hotel shoppers. The 

Commission is unable to quantify what percentage 

of costs will be passed through; to be conservative, 

the analysis includes all costs to foreign hotels and 

home share hosts. 

632 In 2021, Marriott agreed to a settlement with 

the Commonwealth of Pennsylvania, Office of the 

Attorney General, in which Marriott agreed to 

include mandatory resort fees in the base rate of its 

hotel rooms on the first page of the booking process. 

Assurance of Voluntary Compliance, 

Commonwealth v. Marriott Int’l, Inc., No. GD–21– 

014016 (Pa. Ct. C.P. Nov. 16, 2021). In 2023 and 

2024, Marriott entered into similar settlements with 

the Offices of the Attorney General in both the State 

of Nebraska and the State of Texas. Assurance of 

Voluntary Compliance, Texas v. Marriott Int’l, Inc., 

No. 2023–CI09717 (Tex. Dist. Ct. May 16, 2023); 

Order Approving Assurance of Voluntary 

Compliance, Nebraska v. Marriott Int’l, Inc., No. CI 

23–3860 (Neb. Dist. Ct. Jan. 18, 2024). In 2023, 

Omni and Choice Hotels both agreed to similar 

multi-state settlements with the Offices of the 

Attorney General in the State of Colorado, the 

Commonwealth of Pennsylvania, and the State of 

Nebraska. See, e.g., Assurance of Discontinuance, In 

re Choice Hotels Int’l Inc. Resort Fees (Colo. Sept. 

21, 2023); Assurance of Discontinuance, In re Omni 

Hotels Mgmt. Corp. Resort Fees (Colo. Nov 9, 2023); 

Assurance of Voluntary Compliance, 

Commonwealth v. Omni Hotels Mgmt., GD–23– 

013056 (Pa. Commw. Ct. Nov. 9, 2023); Assurance 

of Voluntary Compliance, Commonwealth v. Choice 

Hotels Intl., Inc., GD–23–011023 (Pa. Commw. Ct. 

Sept. 21, 2023); Order Approving Assurance of 

Voluntary Compliance, Nebraska v. Choice Hotels 

Int’l, Inc., No. CI 23–3269 (Neb. Dist. Ct. Sept. 27, 

2023); Order Approving Assurance of Voluntary 

Compliance, Nebraska v. Omni Hotels Mgmt. Corp., 

No. CI 23–3641 (Neb. Dist. Ct. Oct. 27, 2023). 

Choice Hotels agreed to an additional settlement 

with the Oregon Department of Justice. Assurance 

of Voluntary Compliance, In re Choice Hotels, Int’l, 

Inc., No. 23–CV–39128 (Or. Cir. Ct. Sept. 21, 2023). 

In 2024, Hilton Hotels agreed to a settlement with 

the State of Nebraska, Office of the Attorney 

General. Final Consent Judgment, Nebraska v. 

Hilton Dopco, Inc., No. CI 19–2366 (Neb. Dist. Ct. 

Jan. 29, 2024). Finally, Hyatt Hotels faces an 

ongoing lawsuit filed in 2023 by the State of Texas, 

Office of the Attorney General, which seeks to 

require Hyatt to display full prices in the initial 

advertised price of any hotel room. Plaintiff’s 

Original Pet., Texas v. Hyatt Hotels Corp., No. 

C2023–0884D (Tex. Dist. Ct. May 15, 2023). 

(e) Additional Unquantified Benefits: 

Reductions in Deadweight Loss and 

Abandoned Transactions 

As is discussed in section V.E.2.a.ii, 

the final rule requiring short-term 

lodgings to display total price of rooms 

will likely result in a reduction of 

deadweight loss. When consumers are 

not provided total price at the beginning 

of the booking process, sellers likely are 

able to charge higher prices than under 

the final rule. The rule’s total price 

requirement may provide consumers 

with more complete pricing information 

so that they can make informed 

decisions about short-term lodging 

reservations, thus reducing deadweight 

loss. The Commission does not quantify 

the reduction in deadweight loss but 

acknowledges that it is a positive benefit 

to the final rule. 

In some cases, once total price is 

provided, consumers may fully abandon 

the transaction (i.e., not book any room). 

Since lodging cost is only a part of 

overall trip cost, abandoning a 

transaction may be less likely for shortterm lodging than other industries. In 

that case, the unquantified benefit is 

likely to be small. The Commission 

solicited comment in the NPRM on the 

frequency of, and reasons for, 

abandoned transactions in the shortterm lodging industry to help quantify 

this benefit, but did not receive 

adequate information in response, so 

this benefit remains unquantified. 

ii. Short-Term Lodging: Estimated Costs 

of the Final Rule 

The Commission herein describes the 

final rule’s potential costs to the shortterm lodging industry and, where 

possible, provides quantitative estimates 

of those costs. The costs to hotels from 

the final rule include a review of 

whether the rule applies and, in cases 

of noncompliance with the final rule, 

one-time costs to come into compliance 

and recurring annual costs to ensure 

ongoing compliance. The cost of 

employee time is monetized using 

wages obtained from the Bureau of 

Labor Statistics’ National IndustrySpecific Occupational Employment and 

Wage Estimates.629 The Commission 

uses wages specific to the Traveler 

Accommodation industry (associated 

with NAICS code 721100). This 

industry includes traditional hotels and 

motels, casino hotels, bed and breakfast 

inns, hostels, and home share 

platforms.630 The Commission also 

quantifies the cost to individual home 

share hosts in the form of a one-time 

cost to adjust prices on home share 

listings. 

Table 12 outlines the estimated costs 

of the final rule. Panel A shows the 

costs for U.S. hotels and home share 

hosts; Panel B shows the costs for 

foreign hotels and home share hosts 

who post listings on U.S.-facing 

websites; 631 and Panel C shows the total 

combined costs for both groups. 

(a) Panel A: U.S. Hotels and Home Share 

Hosts 

There are 49,216 U.S. hotels 

associated with the ‘‘Traveler 

Accommodation’’ NAICS code. Of these 

firms, 6% impose resort fees, bringing 

the high-end number of U.S. firms 

affected to 2,953. The low-end number 

of firms affected is 2,948 after removing 

Marriott International, Inc., Omni Hotels 

Management Corporation, Choice Hotels 

International, Inc., Hilton Worldwide 

Inc., and Hyatt Hotels Corporation to 

account for the possibility that these 

hotels will eliminate dripped and 

partitioned pricing from their websites 

regardless of this rule to comply with 

any existing or forthcoming settlements 

with various State Attorneys General.632

Next, the Commission’s analysis 

estimates the number of hours a U.S. 

hotel would spend complying with the 

final rule. The analysis assumes all 

hotels that do not impose dripped or 

partitioned pricing will spend one hour 

of lawyer time determining if the final 

rule requires any changes to their 

advertising. Hotels that are not presently 

compliant with the rule will incur 

additional costs to come into 

compliance. In the low-end estimate, 

the analysis assumes that, because many 

hotels have websites facing other 

countries that already have similar 

requirements to the final rule (e.g., 

Canada, Australia, and the European 

Union member states), hotels already 

may have the experience and 

infrastructure required to incorporate 

the necessary changes to their operating 

practices. In this scenario, hotels have 

relatively low costs to transition to allin pricing for their U.S.-facing websites. 

The analysis assumes five hours of 

lawyer time to determine how the final 

rule applies to the firm, forty hours of 

data scientist time to re-optimize the 

pricing strategy, and forty hours of web 

developer time to edit the website to 

display total prices and make other 

requisite disclosures. 

In addition to hotels, the final rule 

also would affect individuals who 

participate in the home share market by 

listing their properties for short-term 

rentals on websites like Airbnb and 

VRBO. The Commission’s analysis 

estimates the total number of home 

share hosts in the U.S. by starting with 

the number of Airbnb hosts in the U.S. 

who post home share listings (not 

including larger bed and breakfast or 

hostel establishments) and extrapolating 

to the full U.S. market using Airbnb’s 


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633See Clark Shultz, Airbnb increases market 

share in latest read from M Science, Seeking Alpha 

(June 6, 2022 1:32 p.m. ET), https://seeking

alpha.com/news/3846023-airbnb-increases-marketshare-in-latest-read-from-m-science (providing 

Airbnb’s market share); Thibault Masson, Airbnb 

Host Data: Who are Airbnb hosts? Why are 

individual hosts more important than professional 

ones?, Rental Scale-Up (updated Dec. 19, 2020), 

https://www.rentalscaleup.com/airbnb-host-datawho-are-airbnb-hosts-why-are-individual-hostsmore-important-than-professional-ones/ (providing 

the statistics used to estimate the number of Airbnb 

home share hosts in the U.S.). The estimated total 

number of home share hosts in the U.S. is 675,603, 

which is calculated as 504,000/.746, where 504,000 

is the number of Airbnb home share hosts in the 

U.S. and .746 is Airbnb’s U.S. market share. The 

number of Airbnb home share hosts is calculated 

as 560,000 * .9 = 504,000, where 560,000 is the 

number of Airbnb hosts in the U.S., and 90% of 

these hosts are individual hosts (people who rent 

individual rooms or entire primary homes rather 

than traditional bed and breakfasts or hostels; 

traditional bed and breakfasts or hostels are already 

captured in the hotel firms defined by Traveler 

Accommodation NAICS code 721100). 

634The average number of listings per host is 

calculated from the total number of U.S. listings 

and the total number of U.S. hosts. Steve Deane, 

2022 Airbnb Statistics: Usage, Demographics, and 

Revenue Growth, Stratos Jet Charters, Inc. Blog (Jan. 

4, 2022), https://www.stratosjets.com/blog/airbnbstatistics/ [https://web.archive.org/web/ 

20220219093345/https://www.stratosjets.com/blog/ 

airbnb-statistics/] (providing the total number of 

U.S. listings); Masson, supra note 633 (providing 

the total number of U.S. hosts). 

635Since home share hosts are not operating 

large, sophisticated firms and will likely not spend 

additional time ensuring compliance beyond year 

one, the analysis assumes home share hosts do not 

incur annual costs due to the rule. 

636The U.S. hotel industry’s global market share 

in 2022 is calculated by adding the revenues 

reported in the IBISWorld Reports for ‘‘Hotels and 

Motels in the US,’’ ‘‘Casino Hotels in the US,’’ and 

‘‘Bed and Breakfast and Hostel Accommodations in 

the US,’’ and dividing it by the global revenue 

found in IBISWorld Global Hotels & Resorts 

Industry Report. Hotels & Motels Industry Report, 

supra note 623; Bed & Breakfast Industry Report, 

supra note 623; Demetrios Berdousis, Casino Hotels 

in the US, IBISWorld (Jan. 2023). 

637Airbnb, Inc., Annual Report (Form 10–K) (Feb. 

16, 2024) (‘‘Airbnb 10–K’’), https://investors.airbnb.

com/financials/sec-filings/sec-filings-details/ 

default.aspx?FilingId=17283799. 

U.S. market share.633 On the low-end, 

the analysis assumes that each host will 

take one hour to reprice each listing. 

Hosts have, on average, 1.18 listings, 

resulting in 1.18 hours of time per 

host.634 The value of time comes from 

the same source as in Table 11. 

In the high-end cost scenario, the 

Commission’s analysis assumes that 

hotels have not laid the groundwork for 

upfront pricing. The analysis assumes 

under this scenario that hotels require 

twice the number of hours to determine 

optimal prices, re-program the website 

to include total price, and review and 

confirm compliance. Thus, the one-time 

costs for hotels include ten hours of 

lawyer time, eighty hours of data 

scientist time, and eighty hours of web 

developer time. The analysis further 

assumes home share hosts spend three 

hours repricing each listing, resulting in 

3.5 hours per host. 

In addition to the one-time costs, the 

Commission’s analysis also assumes 

hotels incur annual costs of between 

zero to ten hours of lawyer time per year 

to review and confirm compliance with 

the final rule.635 The total costs, which 

include both the one-time fixed cost and 

the annual costs for the next ten years 

in present value, range from $35.9 

million to $107.8 million using a 7% 

discount rate, and from $35.9 million to 

$112 million using a 3% discount rate. 

The Commission also finds that the per 

firm annualized cost to U.S. hotels that 

are not presently compliant with the 

rule ranges from $527 to $2,011 using a 

7% discount rate, and from $434 to 

$1,825 using a 3% discount rate. Home 

share hosts in the U.S. incur an average 

one-time cost between $30.42 to $91.27. 

All ranges of lawyer, data scientist, 

web developer, and home share host 

time used in the analysis serve as 

proxies for any costs associated with 

reviewing and ensuring compliance, 

adjusting pricing strategies, ensuring 

consumers are presented with total 

price, and re-evaluating home share 

listings, respectively, in response to the 

final rule. 

(b) Panel B: Foreign Hotels and Home 

Share Hosts 

The Commission acknowledges that 

non-U.S. firms and home share hosts 

with U.S.-facing websites may bear 

compliance costs from the final rule that 

may be passed on to consumers. 

Therefore, the Commission estimates 

these costs using the best available data. 

Estimating costs for foreign hotels and 

home share hosts using the same 

method in Panel A would be difficult 

because there are no reliable estimates 

for the number of foreign hotels and 

home share hosts or for the relevant 

international wage rate for lawyers, data 

scientists, and web developers. The 

Commission’s analysis instead estimates 

foreign costs by extrapolating from the 

estimated U.S. costs in Panel A. Since 

the U.S. hotel industry’s global market 

share is about 14.5%,636 the one-time 

and annual costs for foreign hotels each 

can be calculated by multiplying the 

one-time and annual costs for U.S. 

hotels by (1¥0.145)/0.145. This method 

captures the cost of all foreign hotels, 

including ones that will not be subject 

to the final rule because they do not 

have U.S.-facing advertising. Therefore, 

the costs to foreign hotels may be 

overestimated. 

The Commission’s analysis uses the 

percentage of Airbnb’s U.S. revenue 

(43%) 637 as a proxy for the U.S. home 

share market’s global market share. 

Using this proxy, the analysis estimates 

the one-time cost for foreign home share 

hosts to be equal to the total one-time 

cost for U.S. home share hosts 

multiplied by (1¥0.43)/0.43. The total 

one-time and annual foreign hotel and 

home-share costs for the next ten years 

in present value range from $117.4 

million to $352.8 million using a 7% 

discount rate, and from $117.4 million 

to $377.9 million using a 3% discount 

rate. The Commission is unable to 

provide the per firm annualized cost for 

foreign hotels and non-U.S. home share 

hosts because the number of foreign 

hotels and home share hosts is not 

known. 

(c) Panel C: All Hotels and Home Share 

Hosts (US + Foreign) 

The total cost for all affected hotels 

and home share hosts over ten years in 

present value is estimated to be from 

$153.3 million to $460.6 million using 

a 7% discount rate and from $153.3 

million to $489.9 million using a 3% 

discount rate. 

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638U.S. Census Bureau, 2021 SUSB Annual 

Datasets by Establishment Industry, supra note 602. 

639FTC–2023–0064–3094 (American Hotel & 

Lodging Association). 

640OEWS Traveler Accommodation, supra note 

629. 

641See OEWS National, supra note 571 

(providing the mean hourly wage); Hamermesh, 

supra note 533 (providing the value of time). 

642See infra section V.E.3.d.ii.b (describing the 

calculations). 

643Airbnb 10–K, supra note 637. 

BILLING CODE 6750–01–C 

iii. Short-Term Lodging: Net Benefits 

Table 13 presents the net benefits of 

the final rule in the short-term lodging 

industry using the quantified benefits 

and costs discussed in section V.E.3.d.i 

and V.E.3.d.ii. To calculate the low-end 

of the range for net benefits, the 

Commission’s analysis subtracts the 

total costs using the high-end cost 

assumptions from the total benefits 

using the low-end benefit assumptions. 

For the high-end of the range for net 

benefits, the analysis subtracts the total 

costs using the low-end cost 

assumptions from the total benefits 

using the high-end benefit assumptions. 


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The quantified benefits and costs 

imply that the final rule will have a 

positive net benefit, even without 

accounting for the unquantified benefit 

of reducing deadweight loss. 

iv. Short-Term Lodging: Uncertainties 

The Commission’s ability to precisely 

estimate benefits and costs is limited 

due to uncertainties in key parameters. 

The quantified benefits and costs for the 

short-term lodging industry rely on a set 

of assumptions based on the best 

available public information. When the 

data are unclear, the analysis uses sets 

of assumptions that would generate a 

range of low- and high-end estimates. 

Table 14 summarizes the key 

assumptions and how they may affect 

the resulting estimate of quantified 

benefits and costs. When possible, the 

analysis underestimates benefits and 

overestimates costs in order to 

conservatively estimate net benefits. 

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644The break-even analysis provided in the 

Preliminary Regulatory Analysis utilized the same 

set of assumptions regarding the high-end and lowend numbers of hours required for firms to comply 

with the proposed economy-wide rule. The 

preliminary break-even analysis also made a set of 

assumptions about what proportion of the economy 

currently complied with the provisions of the 

proposed rule. 

BILLING CODE 6750–01–C 

4. Economic Evaluation of Alternatives 

As an alternative to the rule, the 

Commission considered not pursuing 

rulemaking and instead relying on its 

existing tools of enforcement actions 

and consumer education. This approach 

is equivalent to a no-action baseline and 

would result in no incremental benefits 

or costs. The prevalence of drip pricing 

and hidden mandatory fees would 

persist. 

The Commission also alternatively 

considered, as discussed in the 

Preliminary Regulatory Analysis, 

promulgating an industry-neutral 

version of the rule. The Commission 

was unable to quantify economy-wide 

benefits and provided a break-even 

analysis using quantified compliance 

costs for the entire economy.644 The 

economy-wide break-even analysis 

implied there would be positive net 

benefits to the rule if the benefit per 

consumer was at least $6.65 per 

consumer per year over a ten-year 

period assuming a 7% discount rate or 

at least $5.95 assuming a 3% discount 

rate. The Commission estimated that per 

firm annualized costs for an economywide rule would be between $691 and 

$2,010 assuming a 7% discount rate and 

between $569 and $1,803 assuming a 

3% discount rate. 

The Commission sets forth additional 

alternatives to the final rule that it 

considered in section V.B but does not 

have sufficient data to prepare a 

quantitative analysis of those 

alternatives. 

5. Summary of Results 

The Commission’s final regulatory 

analysis catalogs and, where possible, 

quantifies the incremental benefits and 

costs of the final rule for the live-event 

ticketing and short-term lodging 

industries. The Commission estimates 

that the quantified benefits of the rule 

will exceed its quantified costs, and the 

Commission believes that the total 

benefits of the rule (quantified and 

unquantified) will outweigh the total 

costs (quantified and unquantified). The 

Commission estimates that the benefits 

of the final rule over the next ten years 

accruing solely from reduced consumer 


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645Chetty, supra note 555. 

search costs in the live-event ticketing 

industry range from $184 million to 

$2.46 billion under an assumed 7% 

discount rate, and $224 million to $2.99 

billion using an assumed 3% discount 

rate. The Commission estimates 

compliance costs for live-event ticketing 

firms over the ten-year period to be 

between $15 million and $142 million 

using a 7% discount rate, and between 

$15 million and $154 million using a 

3% discount rate. 

For the short-term lodging industry, 

the Commission estimates ten-year 

benefits to consumers from reduced 

search costs to range from $4.93 billion 

to $7.17 billion using a 7% discount 

rate, and between $5.99 billion and 

$8.71 billion using a 3% discount rate. 

The Commission estimates compliance 

costs for short-term lodging firms for the 

ten-year period to be between $153 

million and $461 million using a 7% 

discount rate and between $153 million 

and $490 million using a 3% discount 

rate. 

The Commission also provides a 

break-even analysis using quantified 

compliance costs that are aggregated for 

the live-event ticketing and short-term 

lodging industries. The break-even 

analysis demonstrates that there are 

positive net benefits to the rule if the 

benefit per consumer is at least $0.33 

per consumer per year over a ten-year 

period using a 7% discount rate. The 

break-even analysis does not account for 

costs from unintended consequences of 

the rule or the potential benefits from 

reducing deadweight loss by providing 

consumers with full information. 

6. Appendix A: Model of Market 

Distortion Caused by Drip Pricing 

Measuring the deadweight loss, the 

surplus transfer from consumers to 

firms, and the shift in quantity 

demanded requires a quantification of 

consumers’ aggregate level of awareness. 

Academic research provides a model 

that relates consumers’ partial 

awareness to the resulting shift in 

aggregate demand.645 Specifically, the 

model assumes, based on empirical 

evidence, the elasticity of demand with 

respect to the fee equals the elasticity of 

demand with respect to the base price 

scaled by a factor of q, where 0 < q < 

1. This factor, q, serves as a measure of 

consumers’ awareness of the fee. When 

consumers are fully aware of the fee, q 

= 1; when consumers are completely 

unaware, q = 0. As a working example, 

if demand is given by the equation 

Q(Pbase,t) = a + bPbase + ct, where a, b, 

and c are constants, the previous 

assumption implies that c = qb. At q = 

1, shrouding the fee has no effect, and 

the demand function simplifies to 

Q(Ptotal, t) = a + bPtotal. At q = 0, 

shrouding the fee leaves consumers 

completely unaware of it, and demand 

is solely a function of the base price: 

Q(Pbase, t) = a + bPbase. Assuming 0 < q 

< 1, instead, one may note that, for any 

given change in the base price and the 

corresponding change to the quantity 

demanded, a larger change in the fee 

would be needed to effect the same 

change in quantity, reflecting 

consumers’ partial awareness of, and 

decreased sensitivity to, the fee. 

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BILLING CODE 6750–01–C 

Figure 4 illustrates how consumers’ 

partial awareness of fees impacts the 

effect of shrouded pricing on consumer 

and producer surplus. The intersection 

of Dpartial with S, illustrated by point R, 

at quantity Qpartial and price Ptotal,partial, 

represents the outcome when 

consumers are partially aware of the fee. 

In this figure, Dfee,Pbase,partial (not shown) 

would go through point U (equivalent to 

point A in Figure 3) and point R 

(equivalent to point B in Figure 3). For 

comparison, in the case of complete 

unawareness (q = 0), Dfee,Pbase,unaware (not 

shown) would go vertically through 

point K (equivalent to point A in Figure 

3) and point J (equivalent to point B in 

Figure 3). As illustrated in Figure 4, the 

more consumers are aware of the fee, 

i.e., the larger the q, the smaller the 

market clearing full price and, hence, 

the base price, must be. As an additional 

example, when consumers are fully 

aware of the fee (q = 1), the market 

clearing full price under shrouded 

pricing equals the market clearing price 

under upfront pricing, Pupfront, and the 

base price, Pbase,aware (not shown), is 

lower than Pbase,partial. 

Consumer surplus is now equal to the 

area of triangle CMN minus the area of 

triangle NRT. Producer surplus is now 

equal to the area of triangle EMR. The 

deceptive shrouding of the price leads 

to a transfer of surplus from consumers 

to firms equal to the area of trapezoid 

ABMR as well as an additional decrease 

in consumer surplus not captured by 

firms, the deadweight loss, equal to the 

area of triangle ART. The surplus 

transfer from consumers to firms and 

the deadweight loss are both smaller in 

this case of partial awareness relative to 

the case where consumers are 

completely unaware of the fee. That is, 

the harm caused by the firms’ deception 

is mitigated by the extent to which 

consumers are aware of and account for 

the fee. 


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646Andrey Fradkin, Search, Matching, and the 

Role of Digital Marketplace Design in Enabling 

Trade: Evidence from Airbnb, (MIT Initiative on the 

Digit. Econ., Working Paper, 2017), https://

ide.mit.edu/wp-content/uploads/2017/07/Search

MatchingEfficiency.pdf. 

7. Appendix B: Short-Term Lodging 

Industry Minutes per Listing 

Calculations 

(a) Low-End Estimate of Minutes per 

Listing Calculation 

The Commission’s analysis uses the 

Airbnb user search statistics reported in 

Fradkin (2017) 646 to obtain a low-end 

time estimate to view one listing after 

clicking on it. The paper provides data 

on a random sample of users who 

searched for short-term rentals on 

Airbnb in a large U.S. city. It reports 

search behavior separately for all 

searchers and for searchers who 

contacted the host, either to inquire 

about a listing or to book it. The analysis 

uses those numbers to calculate search 

behavior for the group of searchers who 

did not send a contact. The relevant 

statistics for these three groups are 

summarized in Table B.1. 

‘‘Average unique listings seen’’ 

includes all listings users see on a 

search result page, including listings 

users do not click on. ‘‘Average time 

spent browsing’’ includes entering 

search parameters, scrolling through 

results, and viewing listings after 

clicking on them. ‘‘Average number of 

contacts’’ is the average number of times 

searchers contacted a host for a listing. 

Since contacting the host requires users 

to click on the listing, the analysis uses 

this as a proxy for number of clickedon listings. 

From the third column, we calculate: 

Time to view each listing without clicks 

= Average time spent browsing/ 

Average unique listings seen = 

23.253/57.61 = .40 minutes per 

listing. 

Because the average time spent 

browsing for the group in column (2) is 

inclusive of the amount of time spent 

sending contacts, not just viewing 

listings that were not contacted, we use 

the preceding value calculated from the 

group in column (3) to estimate the 


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647The numerator of ‘‘Time per listing’’ is an 

underestimate because ‘‘Time spent browsing 

without clicks’’ may capture some time spent 

viewing clicked-on listings that did not result in a 

contact. The denominator of ‘‘Time per listing’’ is 

also an underestimate because the number of 

listings clicked on is proxied using the number of 

listings users inquire about or book. Users may click 

on more listings than just the ones they want to 

inquire about or book. The two values are related. 

If the true denominator is higher than estimated, 

then the true numerator also will be higher. Higher 

listing clicks beyond those that resulted in a contact 

means more time spent viewing clicked-on listings 

that did not result in a contact. The ratio should 

remain about the same. 

648 Yuxin Chen & Song Yao, Sequential Search 

with Refinement: Model and Application with 

Click-Stream Data, 63 Mgmt. Sci. 4345 (2016), 

https://doi.org/10.1287/mnsc.2016.2557. 

649 44 U.S.C. 3502(3); 5 CFR 1320.3(c). 

650 5 CFR 1320.8(a)(4). 

651See Office of Info. and Regul. Aff., Office of 

Mgmt. and Budget, OMB Control Number History 

for OMB Control Number 3084–0176, https://

www.reginfo.gov/public/do/PRAOMB

History?ombControlNumber=3084-0176#. 

following that applies to searchers in 

column 2: 

Time spent viewing listings without 

clicks = Time to view each listing 

without clicks * Average unique 

listings seen = .40 * 87.812 = 35.44 

minutes 

and 

Average total time viewing listings after 

clicking = Average time spent 

browsing¥Time spent viewing 

listings without clicks = 

57.874¥35.44 = 22.43 minutes. 

Finally, we calculate time to view one 

listing: 

Time per listing = Average total time 

viewing listings after clicking/ 

Average number of contacts = 

22.43/2.367 = 9.48 minutes per 

listing.647

(b) High-End Estimate of Minutes per 

Listing Calculation 

The Commission’s analysis uses the 

hotel search cost model developed by 

Chen and Yao (2016) 648 to calculate a 

high-end estimate of minutes to view 

one listing. The paper uses data from 

consumer search behavior when 

booking hotels in four major 

international cities on an anonymous 

major U.S. online travel website. 

A search is defined as a listing clickthrough, and the search cost for a listing 

is specified as: 

Cij = Ci (TimeConstrainti, Slotj) = exp(gi0

+ gi1TimeConstrainti + gi2Slotj) = 

exp(3.07 ¥ .05 * TimeConstrainti + 

.01 * Slotj) 

where TimeConstrainti is the number of 

days between consumer i’s search and 

her check-in. Slotj is the slot position of 

the j-th search. The exponential operator 

ensures that the costs are positive. The 

gammas are mean levels of cost 

coefficients. 

Using this formula, the analysis can 

find that the mean search cost per 

listing when 30 days in advance (the 

sample average) is exp(3.07 ¥ (.05*30)) 

= $4.81 per listing. The inflation 

adjusted value is $6.10. 

The resulting total search cost is then 

$6.10 per listing * 2.3 searches on 

average = $14.04. This total cost can be 

conceptualized as the number of 

minutes of viewing listings multiplied 

by the consumer’s value of time. Using 

$25.81 per hour as the value of time, the 

time spent viewing listings is ($14.04/ 

$25.81 per hour) * 60 minutes per hour 

= 32.62 minutes. 

The minutes to view one listing is 

then calculated as 32.62 minutes/2.3 

searches = 14.18 minutes per listing. 

VI. Paperwork Reduction Act 

The Paperwork Reduction Act 

(‘‘PRA’’), 44 U.S.C. 3501–3520, requires 

Federal agencies to seek and obtain 

OMB approval before collecting 

information directed to ten or more 

persons. The term ‘‘collection of 

information,’’ as used in the PRA, 

includes any requirement or request for 

persons to obtain, maintain, retain, 

report, or publicly disclose 

information.649 The PRA analysis 

requires an estimate of the burden 

associated with a collection of 

information.650

Upon publication of the NPRM, the 

Commission submitted an associated 

clearance request with a Supporting 

Statement to OMB for review under the 

PRA. In response, OMB filed a comment 

on December 11, 2023 (OMB Control 

No. 3084–0176), requesting that the 

Commission resubmit the clearance 

request upon the finalization of the 

proposed rule.651 Accordingly, 

simultaneously with the publication of 

this final rule, the Commission is 

resubmitting its clearance request and a 

Supplemental Supporting Statement to 

OMB for review under the PRA. For the 

reasons discussed below, the 

Commission has made adjustments to 

its initial burden analysis. The 

Commission’s updated burden analysis 

follows. 

A. Disclosures Related to Final 

§ 464.2(a) Through (c) 

Final § 464.2(a) through (c) provide 

clarity as to how businesses should 

disclose total price, optional exclusions 

from total price, and the final amount of 

payment. This information is readily 

available to businesses, and many 

businesses already disclose this 

information in the course of their 

regular business activities. However, the 

Commission is aware that in some 

instances the requirements in final 

§ 464.2(a) through (c) may require some 

businesses to display readily available 

information more clearly. OMB 

guidance is unclear regarding whether, 

and to what extent, requiring displays of 

information to be clearer amounts to a 

collection of information. The 

Commission is of the view that the 

rule’s requirements regarding disclosure 

of total price, exclusions from total price 

and the final amount of payment are 

unlikely to qualify as collections of 

information. Nevertheless, the 

Commission includes this analysis out 

of an abundance of caution and not 

because it concedes that such standard 

pricing disclosures constitute 

collections of information. 

Final § 464.2(a) provides it is an 

unfair and deceptive practice for a 

business to offer, display, or advertise 

any price of a covered good or service 

without clearly and conspicuously 

disclosing total price, which is defined 

in final § 464.1 to permit the exclusion 

of government charges, shipping 

charges, and fees or charges for any 

optional ancillary good or service. 

While businesses may exclude these 

charges from total price in offers, 

displays, and advertisements, final 

§ 464.2(c) provides that, before a 

consumer consents to pay for any 

covered good or service, a business must 

disclose clearly and conspicuously: The 

nature, purpose, and amount of any fee 

or charge imposed on the transaction 

that has been excluded from total price 

and the identity of the good or service 

for which the fee or charge is imposed; 

and the final amount of payment for the 

transaction. Final § 464.2(b) relatedly 

provides that in any offer, display, or 

advertisement that represents any price 

of a covered good or service, total price 

must be disclosed more prominently 

than any other pricing information; 

however, where the final amount of 

payment for the transaction is 

displayed, it must be more prominent 

than, or as prominent as, total price. As 

discussed in section III, the Commission 

is not finalizing the proposed 

affirmative refundability disclosure 

requirement. 

As part of the NPRM, the Commission 

assumed that, except for the proposed 

affirmative refundability disclosure 

requirement, the Commission’s proposal 

was limited to disclosure activities that 

businesses already perform in the 

course of their regular business 

activities. However, following its review 


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652See, e.g., FTC–2023–0064–3238 (Gibson, Dunn 

& Crutcher LLP argued that businesses would need 

to hire, among other professionals, web designers or 

software engineers ‘‘to rebuild entire websites.’’ In 

addition, it argued that the Preliminary Regulatory 

Analysis did not account for costs needed to replace 

physical ads, subway ads, and billboards and 

speculated that would take ‘‘thousands of hours.’’); 

FTC–2023–0064–2856 (National Football League 

called on the Commission to reexamine the 

estimated compliance costs because it did not 

adequately take into account ‘‘the additional legal, 

developer, and data personnel time that would be 

required from live-event industry participants—and 

especially industry participants dealing in large 

volumes of live-event ticket sales in complying with 

a final rule.’’); FTC–2023–0064–3122 (Vivid Seats 

commented: ‘‘We believe that the FTC is 

underestimating the amount of employee time 

required by at least a factor of five.’’). 

653Brick-and-mortar firms that do not currently 

comply with the rule would update the price 

presentation and purchase process by printing new 

price displays, revising advertising campaigns, 

adding required disclosures, and potentially 

updating websites. The Commission uses web 

developer hours as a proxy for any costs associated 

with updating the price presentation and purchase 

process to become compliant with the final rule. 

654The estimated mean hourly wages for a web 

developer are $45.95. OEWS Web Developers, supra 

note 571. 655The estimated mean hourly wages for a web 

developer are $39.31 in the short-term lodging 

industry. OEWS Web Developers, supra note 571. 

656See, e.g., N.Y. Arts & Cult. Aff. Law sec. 25.01– 

25.33 (McKinney 2023) (Effective Jun. 30, 2022); An 

Act Ensuring Transparent Ticket Pricing, H. 259, 

193rd Gen. Court (Mass. 2023); S. 607 (2023–2024 

Session) (N.C. 2023) (Enacted July 9, 2024); 2023 

Minn. H.B. 3438 (Enacted May 20, 2024) (Minn.); 

H.B. 1231 (113th G.A.) (Tenn.) (Enacted May 24, 

2023); Conn. Gen. Stat. § 53–289a (2023); S.B. 329 

(2024 Reg. Sess.) (Md.); S.B. 329 (2024 Reg. Sess.) 

(Md.) (Enacted May, 9, 2024); H.B. 23–1378 (2024 

Reg. Sess.) (Colo.) (Enacted June 5, 2024). 

of the comments,652 the Commission 

determines that, although many 

businesses already make the disclosures 

required by final § 464.2(a) through (c) 

in the usual course of their regular 

business activities, it is possible that 

some businesses in the live-event 

ticketing and short-term lodging 

industries may nonetheless incur 

incremental labor costs in ensuring that 

their disclosure activities are fully 

aligned with the requirements that are 

set forth in final § 464.2(a) through (c). 

As a result, out of an abundance of 

caution, the Commission updates its 

burden analysis in recognition of these 

comments. As described in section 

VI.A.5, however, the estimated costs 

may be overestimated. 

1. Number of Respondents 

The Commission estimates that there 

are 12,393 entities that may incur 

additional incremental labor costs to 

refine their disclosure activities so that 

they are fully compliant with final 

§ 464.2. This estimate of 12,393 entities 

takes the high-end estimate of the 

number of firms in the United States in 

the live-event ticketing industry (9,440 

firms) and the number of firms in the 

United States in the short-term lodging 

industry (2,953) that will incur 

additional compliance costs related to 

disclosure activities. 

2. Estimated One-Time Hour Burden 

In section V.E.3, the Commission 

estimates the cost of adjusting the 

presentation of advertised prices and 

the purchase process for online sales. 

The final regulatory analysis in section 

V assumes live-event ticketing and 

short-term lodging firms not presently 

compliant with the final rule will 

employ a low end of forty hours and a 

high end of eighty hours of web 

developer time to become compliant 

with the final rule. For purposes of this 

PRA analysis, the Commission uses the 

midpoint of the range of web developer 

hours presented in section V.E.3; that is, 

the Commission assumes sixty hours of 

web developer time will be necessary to 

adjust advertised prices and purchase 

processes to comply with final § 464.2’s 

disclosure requirements.653 Once firms 

adjust advertised prices and purchase 

process displays to be compliant with 

the final rule, any future changes to 

pricing displays or purchasing systems 

are part of the regular course of business 

and are not a direct consequence of the 

rule. The Commission finds that any 

ongoing additional costs associated with 

these activities are de minimis. Thus, 

the Commission estimates the total web 

developer hours to adjust price displays 

and purchase processes is 743,580 hours 

(12,393 firms × 60 web developer hours 

per firm). 

3. Estimated One-Time Labor Costs 

The estimated one-time labor cost that 

live-event ticketing and short-term 

lodging firms may incur to comply with 

final § 464.2’s disclosure requirements 

is $32,990,931. This total is calculated 

by summing the labor costs for the liveevent ticketing and short-term lodging 

industries. The labor cost for the liveevent ticketing industry is calculated by 

applying the hourly wage for web 

developer time in the live-event 

ticketing industry of $45.95 to the 

estimate of 60 hours of web developer 

time multiplied by the number of U.S. 

firms in the live-event ticketing industry 

that incur additional compliance costs 

($45.95/hour × 60 hours per firm × 9,440 

firms) resulting in $26,026,080.654 The 

labor cost for the short-term lodging 

industry is calculated by applying the 

hourly wage for web developer time in 

the short-term lodging industry of 

$39.31 to the estimate of sixty hours of 

web developer time multiplied by the 

number of U.S. firms in the short-term 

lodging industry that incur additional 

compliance costs ($39.31/hour × 60 

hours per firm × 2,953 firms) resulting 

in $6,964,851.655 The total for the two 

industries is $32,990,931 ($26,026,080 + 

$6,964,851). 

4. Estimated One-Time Non-Labor Costs 

The capital and start-up costs 

associated with the final rule’s 

disclosure are de minimis. Any 

disclosure capital costs involved with 

the final rule, such as equipment and 

office supplies, would be costs borne by 

businesses in the normal course of 

business. 

5. Projected Labor Costs Likely 

Overestimated 

In preparing its burden estimate for 

compliance with final § 464.2(a) through 

(c), the Commission considered 

comments noting that some businesses 

may incur incremental labor costs to 

come into compliance with the rule, 

though commenters did not submit 

specific data for the Commission to 

evaluate this contention. As a result, the 

Commission’s updated burden 

calculation relies in part on cost 

assumptions from its final regulatory 

analysis in section V. Applying these 

cost assumptions as one-time fixed costs 

in this burden analysis likely generates 

an overestimate of incremental labor 

costs for a number of reasons. First, the 

number of respondents that will have to 

make changes to their price displays 

and offers is likely to be significantly 

inflated. Since the Commission 

announced its NPRM, California’s 

Honest Pricing Law, SB 478, which was 

amended by SB 1524, went into effect, 

making it illegal for businesses to 

advertise or list prices that do not 

include all mandatory fees or charges 

other than certain government taxes and 

shipping costs. As such, many national 

firms doing business in California, 

including live-event ticketing and shortterm lodging firms, will already have 

incurred costs to develop the 

capabilities to comply with the 

Commission’s rule even if they are 

currently only fully deploying such 

capabilities in California. Similar 

legislative and regulatory efforts have 

been enacted in New York, 

Massachusetts, North Carolina, 

Minnesota, Tennessee, Connecticut, 

Maryland, and Colorado.656 Second, to 

the extent that live-event ticketing and 

short-term lodging firms opt to present 

all-inclusive total prices that obviate the 

need for the disclosures set forth in final 

§ 464.2(b) through (c), such firms will 

require less web developer time to 


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657See 5 CFR 1320.3(c) (definition of the term 

‘‘collection of information’’). 

658See NPRM, 88 FR 77478. 

659 5 U.S.C. 603–605. 

660NPRM, 88 FR 77479–80. 

661See, e.g., FTC–2023–0064–3251 (National RV 

Dealers Association); FTC–2023–0064–2367 (Small 

Business Majority). The Small Business 

Administration, Office of Advocacy raised similar 

criticisms of the proposed rule. See U.S. Small Bus. 

Admin., Office of Advocacy, Re: Trade Regulation 

Rule on Unfair or Deceptive Fees FTC–2023–0064– 

0001, https://advocacy.sba.gov/wp-content/ 

uploads/2024/03/Comment-Letter-TradeRegulation-Rule-on-Unfair-or-Deceptive-Fees.pdf. 

The Commission addresses that comment infra 

section VII.C. 

662FTC–2023–0064–3269 (IHRSA—The Health & 

Fitness Association); FTC–2023–0064–3294 

(International Franchise Association). The 

Commission notes that the final rule is limited to 

Covered Good or Services, which does not include 

the health and fitness industry. 

663A 120-day compliance date after publication 

in the Federal Register complies with the 

requirements of the Congressional Review Act that 

a ‘‘major rule’’ may not take effect fewer than sixty 

days after the rule is published in the Federal 

Register. 5 U.S.C. 801(a)(1)(3). 

664FTC–2023–0064–3251 (National RV Dealers 

Association); FTC–2023–0064–2367 (Small 

Business Majority). 

665The number of firms used in the NPRM was 

provided by the United States Census Bureau’s 

Statistics of United States Businesses. U.S. Census 

Bureau, 2020 SUSB Annual Datasets by 

Establishment Industry (Mar. 2023), https://

www.census.gov/data/datasets/2020/econ/susb/ 

2020-susb.html. 

comply, and the Commission is likely 

overestimating total labor hours. 

B. Prohibited Misrepresentations Under 

Final § 464.3 

Final § 464.3, which the Commission 

proposed in similar form as § 464.3(a), 

sets forth that in any offer, display, or 

advertisement for a covered good or 

service, it is an unfair and deceptive 

practice for a business to misrepresent 

any fee or charge, including its nature, 

purpose, amount, or refundability, and 

the identity of the good or service for 

which the fee or charge is imposed. 

Consistent with the NPRM’s discussion 

of proposed § 464.3(a), the Commission 

notes that final § 464.3 does not impose 

any information collection requirement 

for the purpose of the PRA. Rather than 

imposing any affirmative disclosure, 

reporting, or recordkeeping 

obligations,657 final § 464.3 merely 

prohibits businesses from making 

certain misrepresentations that are 

already prohibited under section 5 of 

the FTC Act. As noted in the NPRM, any 

additional costs that might be associated 

with these prohibitions are de 

minimis.658

VII. Regulatory Flexibility Act—Final 

Regulatory Flexibility Analysis 

The Regulatory Flexibility Act 

(‘‘RFA’’), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, requires an agency 

to provide an Initial Regulatory 

Flexibility Analysis (‘‘IRFA’’) and Final 

Regulatory Flexibility Analysis 

(‘‘FRFA’’) of any final rule subject to 

notice-and-comment requirements, 

unless the agency head certifies that the 

regulatory action will not have a 

significant economic impact on a 

substantial number of small entities.659

In developing the final rule, the 

Commission carefully considered 

whether the rule would have a 

significant impact on a substantial 

number of small entities. The 

Commission continues to believe that 

the final rule’s impact will not be 

substantial for most small entities and, 

in many cases, will likely positively 

impact small businesses by enabling 

them to compete fairly in the 

marketplace with larger players. 

However, the Commission cannot fully 

quantify the impact the final rule will 

have on such entities. Therefore, in the 

interest of thoroughness and an 

abundance of caution, the Commission 

has prepared the following FRFA for 

this final rule. 

In the NPRM, the Commission 

provided an IRFA and solicited 

comments on the burden on any small 

entities that would be covered.660 The 

Commission received comments in 

response to the IRFA.661 The 

Commission received comments from 

two industry groups requesting that the 

Commission conduct a Small Business 

Regulatory Impact Analysis to analyze 

the impact of small businesses in 

particular industries.662 The 

Commission also received comments 

from small business owners and 

industry groups in support of the rule 

and its impact on small businesses, as 

well as from commenters concerned 

about potential costs to small 

businesses. Consistent with the 

requirements of the FRFA, the 

Commission has considered the 

comments received, and the final rule’s 

impact on small entities, including 

alternatives to the final rule. 

The Commission thoroughly 

considered the feedback it received from 

the SBA Office of Advocacy, the Small 

Business Majority, and other 

commenters in developing the final 

rule. The Commission modifies the 

proposed rule in response, in part, to 

such feedback. The Commission will 

continue to engage with small business 

stakeholders to facilitate 

implementation of, and compliance 

with, the final rule and other guidance 

as necessary to assist small entities in 

complying with the rule. 

Based on the Commission’s expertise, 

and after careful review and 

consideration of the entire rulemaking 

record—including the more than 60,800 

comments the Commission received in 

response to the NPRM, empirical 

research on how bait-and-switch pricing 

tactics, including drip pricing and 

partitioned pricing, harm consumers 

and honest competitors, and the 

Commission’s Final Regulatory Analysis 

in section V—the Commission adopts 

this final rule focused on covered goods 

or services with certain additional 

revisions to reduce compliance burdens 

on small businesses and other entities. 

To begin with, because this final rule is 

limited to covered goods or services, 

many industries that have significant 

small business participants are no 

longer covered. Second, the 

Commission adopts an extended 

compliance date—120 days—to ensure 

that small businesses have adequate 

time to come into compliance with the 

rule’s requirements.663 Third, as 

discussed in section III, in response to 

feedback from commenters representing 

the interests of small businesses, the 

Commission clarifies in this SBP that 

businesses may exclude from total price 

pass-through credit card or other 

payment processing fees if they give 

consumers a viable payment alternative 

without a fee (e.g., cash is accepted). In 

addition, as discussed in section III, the 

final rule adopts definitions of 

government charges to increase 

flexibility for businesses, including 

small businesses. 

A. Statement of the Need for, and 

Objectives of, the Rule 

The Commission describes the need 

for, and objectives of, the rule in section 

V.A. The legal basis for the rule is 

section 18 of the FTC Act, 15 U.S.C. 57a, 

which authorizes the Commission to 

promulgate, modify, and repeal trade 

regulation rules that define with 

specificity acts or practices in or 

affecting commerce that are unfair or 

deceptive within the meaning of section 

5(a)(1) of the FTC Act, 15 U.S.C. 

45(a)(1). 

B. Significant Issues Raised by 

Comments, the Commission’s 

Assessment and Response, and Any 

Changes Made as a Result 

Commenters, including the Small 

Business Majority, argued that the IRFA 

failed to appropriately assess the impact 

of the proposed rule on small 

businesses.664 The NPRM assumed that 

of the total estimated firms in the 

United States (6,140,612),665 only a 


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666FTC–2023–0064–3251 (National RV Dealers 

Association); FTC–2023–0064–2367 (Small 

Business Majority). 

667FTC–2023–0064–3251 (National RV Dealers 

Association); FTC–2023–0064–2367 (Small 

Business Majority). 

668FTC–2023–0064–3251 (National RV Dealers 

Association); FTC–2023–0064–2367 (Small 

Business Majority). 

669FTC–2023–0064–2367 (Small Business 

Majority). 

670 Id.; see also U.S. Small Bus. Admin., Office of 

Advocacy, Re: Trade Regulation Rule on Unfair or 

Deceptive Fees FTC–2023–0064–0001, https://

advocacy.sba.gov/wp-content/uploads/2024/03/ 

Comment-Letter-Trade-Regulation-Rule-on-Unfairor-Deceptive-Fees.pdf. 

671See, e.g., FTC–2023–0064–3033 (The Rebel 

Lounge et al.); FTC–2023–0064–3078 (Washington 

Hospitality Association); FTC–2023–0064–2367 

(Small Business Majority). 

672FTC–2023–0064–3292 (National Association 

of Theater Owners). 

673FTC–2023–0064–2840 (Indie Sellers Guild); 

FTC–2023–0064–2341 (New Hampshire State 

Representative Lindsay Sabadosa); FTC–2023– 

0064–3302 (Public Citizen); FTC–2023–0064–3160 

(Consumer Federation of America); FTC–2023– 

0064–3141 (Coalition of Franchisee Associations). 

674FTC–2023–0064–2341 (New Hampshire State 

Representative Lindsay Sabadosa). 

675FTC–2023–0064–3302 (Public Citizen); FTC– 

2023–0064–3160 (Consumer Federation of 

America). 

small fraction (818,178 or about 13%) 

would incur additional costs beyond the 

initial one-hour compliance review to 

comply fully with the proposed rule. 

Commenters, including the Small 

Business Majority, argued that the IRFA 

failed to appropriately assess the impact 

of the proposed rule on small 

businesses.666 For the purpose of the 

IRFA, the Commission concluded that 

the proposed rule would not have a 

significant economic impact on a 

substantial number of small entities and 

solicited comment on its analysis, 

including the submission of supporting 

or contradictory empirical data. The 

Commission did not receive any data or 

other evidence to suggest that the 

number of firms incurring additional 

costs should be higher. The Commission 

anticipates that modifications made in 

the final rule will reduce the number of 

businesses that are likely to incur 

additional costs. 

These commenters further asserted 

the rule’s proposed economic analysis 

underestimated the cost of attorneys’ 

fees and ongoing costs to comply with 

the rule.667 The Commission addresses 

comments and concerns related to its 

economic analysis in section V, 

including estimates for attorneys’ fees 

and ongoing compliance costs. 

The same commenters also noted that 

the Commission’s IRFA failed to 

appropriately consider alternatives to 

the proposed rule for small 

businesses.668 The Commission 

disagrees. The NPRM stated that the 

Commission had considered 

alternatives, including: (1) a rule that 

would exempt small businesses from 

the proposed rule; (2) a rule that would 

apply to online-only businesses; (3) 

alternatives that would otherwise 

narrow the scope of the proposed rule, 

including limiting application of the 

rule to Covered Businesses as defined in 

the NPRM; or (4) terminating the 

rulemaking entirely. Consistent with the 

NPRM, the Commission declines to 

exempt small businesses, including 

those that offer live-event ticketing and 

short-term lodging, from the rule to 

avoid creating uncertainty across 

businesses as to whether the rule 

applies to them, to avoid creating unfair 

competitive advantages for those 

businesses that engage in bait-andswitch pricing and misrepresent fees, 

and to ensure maximum consumer 

benefits from increased price 

transparency. The NPRM also invited 

comment on questions and concerns 

related to small businesses, including 

the estimated number of small 

businesses and the impact on those 

businesses, as well as alternatives to the 

rule for small businesses. The 

Commission’s FRFA includes further 

discussion of the alternatives 

considered in section V.B. 

The Small Business Majority noted 

that many small businesses lack access 

to legal staff and ‘‘run the risk of 

occupying a substantial amount of time 

to understand how exactly they need to 

adjust their pricing models to comply 

with the new rule.’’ 669 As a result, the 

Small Business Majority encouraged the 

Commission to provide guidance to 

small businesses, including through 

outreach, education, and compliance 

guidance, as well as working directly 

with small businesses, to help small 

businesses comply with the final 

rule.670 The Commission highlights and 

discusses herein that, in response to the 

comments, the final rule both narrows 

the NPRM proposal as well as clarifies 

it in certain respects, thereby decreasing 

the burden on small businesses. The 

SBP also discusses various pricing 

scenarios raised by commenters, and the 

Commission believes that such 

discussion will aid businesses, 

including small businesses, in 

complying with the final rule. Finally, 

the Commission routinely provides 

guidance and conducts outreach to 

businesses on complying with the FTC 

Act and regulations that it enforces and, 

as required by law, the Commission will 

publish a small entity compliance guide 

to assist small businesses in complying 

with the rule. 

The Commission received numerous 

comments from industry groups and 

individual small business owners, 

including comments highlighting the 

benefits of the proposed rule on small 

businesses, as well as comments 

identifying certain concerns about 

application of the proposed rule to 

small businesses. The Commission 

addresses many of these comments in 

other parts of the SBP, including section 

III, and accordingly incorporates that 

analysis into its FRFA, and addresses 

the remainder of these comments 

herein. 

Some commenters argued that fees 

help small businesses offset rising costs 

and staff salaries and benefits, 

especially for small businesses 

operating on thin margins.671 One 

industry group argued that the rule 

might place small businesses at a 

competitive disadvantage compared to 

larger businesses.672 As discussed in 

Parts III and V, the Commission narrows 

the scope of the rule to address concerns 

affecting small businesses by, for 

example, modifying the definition of 

government charges and addressing 

factual scenarios and questions 

concerning application of the rule to 

small businesses, including related to 

credit card surcharges and contingent 

fees. In making these clarifications and 

modifications, the Commission narrows 

the total price requirement for, and 

thereby reduces the compliance burden 

on businesses, including small 

businesses, offering covered goods or 

services. As discussed in section VII.C, 

the Commission is also adopting an 

extended 120-day compliance date to 

allow more time for businesses, 

including small businesses, to assess 

and come into compliance with the final 

rule. 

Conversely, other commenters noted 

that bait-and-switch practices and 

misleading fees harm small businesses, 

and that the rule will help small 

businesses.673 One State representative 

asserted that the final rule would help 

small businesses because small 

businesses that advertise the entire price 

of their goods and services are at a 

competitive disadvantage compared to 

larger businesses that advertise lower 

prices and only disclose fees at the end 

of a transaction.674 Consumer advocacy 

groups urged the Commission not to 

exempt small businesses, arguing that 

consumers and small businesses alike 

will benefit from greater pricing 

transparency and a prohibition on 

deceptive pricing.675 The Commission 

also received numerous individual 

comments, including from small 

business owners, expressing support for 


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676See, e.g., FTC–2023–0064–0105 (Individual 

Commenter); FTC–2023–0064–2422 (Individual 

Commenter); FTC–2023–0064–2697 (Individual 

Commenter). 

677U.S. Small Bus. Admin., Office of Advocacy, 

Re: Trade Regulation Rule on Unfair or Deceptive 

Fees FTC–2023–0064–0001, https://

advocacy.sba.gov/wp-content/uploads/2024/03/ 

Comment-Letter-Trade-Regulation-Rule-on-Unfairor-Deceptive-Fees.pdf. 

678 Id. 

679 Id. 

680 Id. 

681 Id. 

682See, e.g., id. (SBA urged the Commission to 

consider ‘‘allowing small businesses more time to 

comply with the rule’’ and to provide clear 

compliance guidance); FTC–2023–0064–2367 

(Small Business Majority urged the Commission to 

issue comprehensive guidance and commented: 

‘‘[M]any small businesses do not have access to 

legal staff or consultants, and without clear and 

specific disclosure requirements provided by 

industry, small businesses run the risk of occupying 

a substantial amount of time to understand how 

exactly they need to adjust their pricing models to 

comply with the new rule.’’). 

683U.S. Small Bus. Admin., Office of Advocacy, 

Re: Trade Regulation Rule on Unfair or Deceptive 

Fees FTC–2023–0064–0001, https://

advocacy.sba.gov/wp-content/uploads/2024/03/ 

Comment-Letter-Trade-Regulation-Rule-on-Unfairor-Deceptive-Fees.pdf. 

684 15 U.S.C. 45(a)(2). The Commission herein 

focuses on coverage of ‘‘corporations.’’ 

685 15 U.S.C. 44. 

686 In re Coll. Football Ass’n, 117 F.T.C. 971, 994 

(1994). 

687Cal. Dental Ass’n v. FTC, 526 U.S. 756, 766– 

67 (1999); Cmty. Blood Bank of Kansas City Area, 

Inc. v. FTC, 405 F.2d 1011, 1019 (8th Cir. 1969); 

FTC v. Univ. Health, Inc., 938 F.2d 1206, 1214 (11th 

Cir. 1991). 

688The Commission has determined that 

‘‘[r]ulings of the Internal Revenue Service are not 

binding upon the Commission, . . . but a 

determination by another Federal agency that a 

respondent is or is not organized and operated 

exclusively for eleemosynary purposes should not 

be disregarded.’’ In re Am. Med. Ass’n, 94 F.T.C. 

701, 990 (1979) (citing In re Ohio Christian Coll., 

80 F.T.C. 815, 848 (1972)). 

689Cmty. Blood Bank, 405 F.2d at 1018; see also, 

e.g., FTC v. Nat’l Comm’n on Egg Nutrition, 517 

F.2d 485, 488 (7th Cir. 1975); In re Coll. Football 

Ass’n, 117 F.T.C. at 998. 

the rule, because it would benefit small 

businesses.676

The Commission notes that the final 

rule does not prohibit any business 

offering live-event ticketing or shortterm lodging from charging consumers 

fees or raising prices to support 

necessary operating costs, such as labor 

costs or rising expenses. The final rule 

instead requires that such charges and 

fees be incorporated in total price and 

that they not be misleading. 

C. Comment by the Small Business 

Administration, Office of Advocacy, the 

Commission’s Assessment and 

Response, and Any Changes Made as a 

Result 

The SBA Office of Advocacy filed a 

comment requesting that the 

Commission ‘‘prepare a supplemental 

initial regulatory flexibility analysis that 

fully considers the economic impact of 

the proposed rulemaking on small 

entities and alternatives that may reduce 

that burden,’’ as well as ‘‘clarify that 

this rulemaking will not apply to small 

non-profit organizations.’’ 677 The SBA 

Office of Advocacy argues that the 

Commission’s IRFA did not comply 

with the requirements of the Regulatory 

Flexibility Act because it ‘‘fail[ed] to 

provide an accurate description of the 

small entities to which the proposed 

rule will apply,’’ and failed to provide 

‘‘an accurate description of the costs 

associated with the compliance 

requirements.’’ 678 According to the SBA 

Office of Advocacy, the Commission 

also ‘‘failed to consider significant 

alternatives that would minimize any 

significant economic impact of the 

proposed rule on small businesses.’’ 679

The Commission has considered this 

comment, which it further summarizes 

herein, and responds as follows. 

The SBA Office of Advocacy 

recommended that the Commission 

count small businesses using NAICScode specific thresholds defined by the 

SBA, rather than using a threshold of 

500 employees.680 In response to this 

comment, the Commission now uses the 

NAICS-code specific thresholds set by 

the SBA to determine the number of 

small businesses in the Final Regulatory 

Flexibility Analysis contained in section 

VII.D. 

The comment further contended that 

‘‘there are other alternatives that the 

FTC should have considered in its 

IRFA,’’ such as ‘‘exempting certain 

sectors of small businesses or imposing 

a limit on certain fees’’ and ‘‘allowing 

businesses more time to comply with 

the rule.681 The Commission did 

consider such alternatives and narrows 

the scope of the final rule to covered 

goods or services, thereby limiting the 

rule’s application to only those 

businesses, including small businesses, 

that offer, display, or advertise such 

goods or services. The Commission 

declines, however, to impose a limit on 

the amount of fees, so long as they are 

disclosed and not misleading in 

accordance with the rule’s 

requirements, including as discussed in 

section III. 

As to the suggestion to give 

businesses more time to comply with 

the rule, the Commission adopts a 

compliance date of 120 days after 

publication of the final rule in the 

Federal Register. The final rule will go 

into effect, and compliance with the 

final rule will be required, on that date. 

This extended timeline considers 

comments received from the SBA Office 

of Advocacy and small businesses, 

underscoring the time it might take to 

come into compliance with the final 

rule. For example, some small 

businesses may decide to seek outside 

guidance about whether they need to 

make adjustments to come into 

compliance, while others will conduct 

their own compliance review.682 The 

Commission finds 120 days should be 

enough time even for small businesses 

conducting their own compliance 

review, and that a 120-day period 

between publication in the Federal 

Register and the rule’s compliance date 

appropriately balances the interests of 

small businesses with the interests of 

protecting consumers. Further, in 

addition to guidance in this SBP, the 

Commission also will publish a small 

entity compliance guide to assist small 

businesses in complying with the rule. 

Finally, the SBA Office of Advocacy 

‘‘encourages the FTC to clarify that this 

rulemaking will not apply to nonprofits.’’ 683 The final rule can be 

enforced to the full scope of the 

Commission’s jurisdiction. Congress 

empowered the Commission to ‘‘prevent 

persons, partnerships, or corporations’’ 

from engaging in ‘‘unfair or deceptive 

acts or practices in or affecting 

commerce.’’ 684 To fall within the 

definition of ‘‘corporation’’ under the 

FTC Act, an entity must be ‘‘organized 

to carry on business for its own profit 

or that of its members.’’ 685 These FTC 

Act provisions, taken together, have 

been interpreted in Commission 

precedent 686 and judicial decisions 687

to mean that the Commission lacks 

jurisdiction to prevent section 5 

violations by a corporation not 

organized to carry on business for its 

own profit or that of its members. The 

Commission stresses, however, that both 

judicial decisions and Commission 

precedent recognize that not all entities 

claiming tax-exempt status as nonprofits fall outside the Commission’s 

jurisdiction.688 ‘‘Congress took pains in 

drafting § 4 [15 U.S.C. 44] to authorize 

the Commission to regulate so-called 

nonprofit corporations, associations and 

all other entities if they are in fact 

profit-making enterprises.’’ 689

D. Description and Estimate of the 

Number of Small Entities To Which the 

Rule Will Apply 

The final rule covers businesses that 

offer short-term lodging and live-event 

tickets. Small businesses that currently 

comply with the final rule will have a 

relatively trivial cost of assessing 

whether they are currently in 


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690See U.S. Small Bus. Admin., Table of Small 

Bus. Size Standards, https://www.sba.gov/ 

document/support-table-size-standards. 

691The Commission uses the latest data available 

from the Census Bureau’s Statistics of U.S. 

Businesses database, available based on firm 

revenue and firm size. U.S. Census Bureau, Stat. of 

U.S. Bus. (last revised July 9, 2024), https://

www.census.gov/programs-surveys/susb.html. The 

calculation of 9,034 live-event ticketing firms is 

likely an overestimate of the number of small 

businesses due to data incompatibility and the use 

of the high-end assumption regarding how liveevent ticketing firms are categorized using NAICS 

codes. The U.S. SBA sets different revenue 

thresholds for different NAICS codes. However, the 

Statistics of U.S. Businesses does not necessarily 

report the number of firms with earnings under 

those particular thresholds. Therefore, the 

Commission calculates there may be as many as 

3,094 firms in NAICS code 711310 with receipts 

under the SBA threshold of $40 million, 4,358 firms 

in NAICS code 711320 with receipts under $25 

million (an overestimate given the SBA threshold 

of $22 million for NAICS code 711320), and 1,582 

firms in NAICS code 561599 with receipts under 

$35 million (an overestimate given the SBA 

threshold of $32.5 million for NAICS code 561599). 

692 Id. The calculation of 2,798 small hotels firms 

is likely an overestimate of the number of small 

businesses due to data incompatibility. The U.S. 

SBA sets a revenue threshold of $9 million for 

NAICS code 721191 and NAICS code 721199. 

However, the Statistics of U.S. Businesses does not 

report number of firms for those particular 

thresholds. Therefore, the Commission calculates 

there are as many as 42,186 firms in NAICS code 

721110 with receipts under the SBA threshold of 

$40 million, 101 firms in NAICS code 721120 with 

receipts under the SBA threshold of $40 million, 

2,960 firms in NAICS code 7211191 with receipts 

under $10 million (an overestimate given the SBA 

threshold), and 1,384 firms with receipts under $10 

million (an overestimate given the SBA threshold). 

693 5 U.S.C. 604(a)(6). 

694See 5 U.S.C. 603(c). 

695NPRM, 88 FR 77479–83. 

696 Id. 

compliance, and the Commission 

assumes these firms will require at most 

one hour of lawyer time to confirm 

compliance. Small businesses that offer 

covered goods or services and currently 

do not disclose total price will incur 

additional costs to adjust advertised 

prices, their marketing campaigns, and 

the consumer purchase process to 

comply with the rule. 

Using the size standards set by the 

SBA,690 the Commission calculates that 

there are potentially as many as 9,034 

small firms in the U.S that may sell 

tickets for live events.691 For the 

economic regulatory analysis in section 

V, the Commission assumes all liveevent ticketing firms will incur 

additional costs to adjust advertised 

prices, their marketing campaigns, and 

the consumer purchase process to 

comply with the rule. The Commission 

notes that there may be some live-event 

ticket sellers that are currently in 

compliance and will therefore have a 

trivial cost of compliance with the final 

rule. 

For the short-term lodging industry, 

the Commission separately estimates 

there are as many as 675,603 home 

share hosts in the U.S. The Commission 

assumes that these home share hosts are 

all considered small entities. Using the 

NAICS-code specific thresholds set by 

the SBA, the Commission calculates that 

there are potentially as many as 2,798 

small firms within NAICS code 7211 

(‘‘Accommodation’’).692

E. Description of the Projected 

Reporting, Recordkeeping, and Other 

Compliance Requirements 

The final rule contains no reporting or 

recordkeeping requirements; however, 

the final rule imposes disclosure 

obligations. Only small entities that 

offer, display, or advertise covered 

goods or services must comply with the 

rule and, therefore, will incur 

compliance costs. To comply with the 

final rule, small entities that offer, 

display, or advertise any price of a 

covered good or service are required to 

disclose the total price clearly and 

conspicuously and, generally, more 

prominently than any other pricing 

information. Small entities must also 

disclose other imposed fees and charges 

before a consumer consents to pay and 

must not misrepresent any fee or charge. 

For firms that already comply with the 

final rule, the one-time indirect cost per 

firm is assumed to be, at most, one hour 

of lawyer time for regulatory 

familiarization. This cost is excluded 

from the Regulatory Flexibility Analysis 

since such familiarization is not a 

compliance requirement. 

For small businesses subject to the 

rule that are not currently in compliance 

with the rule’s requirements, the 

Commission has determined that firms 

will need to adjust advertised prices, 

marketing campaigns, and the purchase 

process to comply with the rule. These 

firms may also incur recurring annual 

costs of additional lawyer time to assess 

and confirm annual compliance. As 

discussed in more detail in section V, 

the Commission estimates that direct 

compliance costs in the live-event 

ticketing industry, over a ten-year 

period, would result in annualized costs 

of $648–$2,144 per firm assuming a 7% 

discount rate or $534–$1,916 per firm 

assuming a 3% discount rate. U.S. home 

share hosts would incur one-time costs 

re-optimizing prices of $30.42–$91.27. 

The Commission also estimates direct 

compliance costs for U.S. hotels, over a 

ten-year period, would result in 

annualized costs of $527–$2,011 per 

firm assuming a 7% discount rate or 

$434–$1,825 per firm assuming a 3% 

discount rate. These estimates, however, 

are for firms of all sizes; the 

Commission has not separately 

estimated the costs for small businesses 

specifically. 

F. Discussion of Significant Alternatives 

the Commission Considered That Would 

Accomplish the Stated Objectives of the 

Final Rule and That Would Minimize 

Any Significant Economic Impact of the 

Final Rule on Small Entities 

The Regulatory Flexibility Act 

requires that agencies include a 

description of the steps the agency has 

taken to minimize the significant 

economic impact on small entities 

consistent with the stated objectives of 

applicable statutes, including a 

statement of the factual, policy, and 

legal reasons for selecting the alternative 

adopted in the final rule and the other 

significant alternatives to the rule 

considered by the agency which affect 

the impact on small entities was 

rejected.693 Statutory examples of 

‘‘significant alternatives’’ include 

different requirements or timetables that 

take into account the resources available 

to small entities; the clarification, 

consolidation, or simplification of 

compliance and reporting requirements 

under the rule for small entities; the use 

of performance rather than design 

standards; and an exemption from 

coverage of the rule, or any part thereof, 

for small entities.694

In the NPRM, the Commission sought 

comment on various potential 

alternatives to the proposed rule, 

including alternatives that were tailored 

to the needs of small businesses and 

that addressed the impact (including 

costs) that would be incurred by 

businesses to comply with the proposed 

rule.695 Specifically, the Commission 

sought comment on the estimated 

number and the nature of small business 

entities for which the proposed rule 

would have a significant economic 

impact, whether the proposed rule 

would have a significant economic 

impact on a substantial number of small 

entities, and if so, how it could be 

modified to avoid such an impact, as 

well as whether the proposed definition 

for ‘‘business’’ should exclude certain 

businesses, including small businesses 

meeting the SBA’s definition of a ‘‘small 

business concern’’ and the SBA’s Table 

of Size Standards, or simply certain 

limited-service and full-service 

restaurants meeting such 

requirements.696 The Commission also 

inquired as to whether the ‘‘total price’’ 

definition should exclude mandatory 

charges by restaurants for service 

performed for the customer in lieu of 

tips, as defined by the Department of 


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697 Id., 88 FR 77481. 

Labor.697 The Commission also 

considered alternatives that would 

otherwise narrow the scope of the 

proposed rule, including limiting 

application of the rule to ‘‘Covered 

Businesses’’ as defined in the NPRM, 

ultimately adopting a variation of this 

approach in the final rule. 

The Commission requested this 

information to minimize the final rule’s 

burden on all businesses, including 

small entities. As explained through this 

SBP, the Commission has considered 

the comments and alternatives proposed 

by the commenters, including the SBA 

Office of Advocacy, and finds that the 

final rule will not create a significant 

impact on small entities. Indeed, the 

type of deception that will be unlawful 

under the final rule is already unlawful 

under the FTC Act, but the final rule 

would allow the Commission to obtain 

monetary relief more efficiently than it 

could solely under section 19(a)(2) of 

the FTC Act (i.e., without a rule 

violation), thereby deterring current and 

would be violators of the FTC Act. 

In its Preliminary Regulatory 

Analysis, the Commission described an 

alternative to the proposed rule, namely, 

to terminate the rulemaking and rely 

instead on the Commission’s previously 

existing tools, such as consumer 

education and enforcement actions 

brought under sections 5 and 19 of the 

FTC Act, to combat the specified unfair 

or deceptive pricing practices. The 

Commission believes that promulgation 

of the rule will result in greater net 

benefits to the marketplace while 

imposing no additional burdens beyond 

what is required by the FTC Act. As the 

Commission describes further in section 

V, the rule will not only result in 

significant benefits to consumers but 

also improve the competitive 

environment, particularly for small, 

independent, or new firms. Therefore, 

the rule appears to be superior to this 

alternative for small entities. 

As discussed herein, the Commission 

narrows the rule by adding a definition 

for ‘‘covered good or service’’ that is 

limited to Live-event tickets or Shortterm lodging. The Commission also 

modifies the definition of government 

charges to replace the language that 

included only those government charges 

levied ‘‘on consumers,’’ with language 

clarifying that any government charge 

‘‘imposed on the transaction’’ may be 

excluded from total price. Finally, the 

Commission addresses in section III 

how the rule would apply to credit card 

processing fees and contingent fees 

charged by small businesses. 

The Commission notes that it has 

designed the final rule to minimize 

compliance costs for all businesses. As 

stated in section V, the Commission 

estimates that direct compliance costs in 

the live-event ticketing industry, over a 

ten-year period, would result in 

annualized costs of $648–$2,144 per 

firm assuming a 7% discount rate or 

$534–$1,916 per firm assuming a 3% 

discount rate. U.S. home share hosts 

would incur one-time costs reoptimizing prices of $30.42–$91.27. The 

Commission also estimates direct 

compliance costs for U.S. hotels, over a 

ten-year period, would result in 

annualized costs of $527–$2,011 per 

firm assuming a 7% discount rate or 

$434–$1,825 per firm assuming a 3% 

discount rate. Based on the available 

evidence, the Commission does not 

believe that the analysis in section V is 

fundamentally different for small 

entities. For this reason, the 

Commission is not creating an exception 

for small entities or creating different 

regulatory requirements for small 

entities. 

The Commission also is not delaying 

the effective date of the final rule solely 

for small entities. The final rule’s 

effective date is 120 days after 

publication in the Federal Register on 

May 9, 2025. In the Commission’s view, 

the rule’s effective date of May 9, 2025 

will afford small entities sufficient time 

to comply with the final rule, and 

commenters have not provided evidence 

that more time is necessary. The 

Commission declines to set different 

effective dates for small businesses and 

larger businesses because the final rule’s 

core objectives include promoting 

comparison shopping for consumers 

and leveling the playing field for honest 

competitors. For all of the reasons 

stated, these objectives would be 

thwarted in a marketplace where certain 

businesses must comply with the rule’s 

requirements for a period of time while 

others have more time to continue 

engaging in unfair or deceptive pricing 

practices. 

VIII. Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the Office of 

Information and Regulatory Affairs has 

designated this rule as a ‘‘major rule,’’ 

as defined by 5 U.S.C. 804(2). 

List of Subjects in 16 CFR Part 464 

Advertising, Consumer protection, 

Trade practices. 

■ For the reasons set forth above, the 

Federal Trade Commission adds part 

464 to chapter I of title 16 of the Code 

of Federal Regulations to read as 

follows: 

PART 464—RULE ON UNFAIR OR 

DECEPTIVE FEES 

Sec. 

464.1 Definitions. 

464.2 Hidden fees prohibited. 

464.3 Misleading fees prohibited. 

464.4 Relation to State laws. 

464.5 Severability. 

Authority: 15 U.S.C. 41 through 58. 

§ 464.1 Definitions. 

Ancillary good or service means any 

additional good(s) or service(s) offered 

to a consumer as part of the same 

transaction. 

Business means an individual, 

corporation, partnership, association, or 

any other entity that offers goods or 

services, including, but not limited to, 

online, in mobile applications, and in 

physical locations. 

Clear(ly) and conspicuous(ly) means a 

required disclosure that is easily 

noticeable (i.e., difficult to miss) and 

easily understandable by ordinary 

consumers, including in all of the 

following ways: 

(1) In any communication that is 

solely visual or solely audible, the 

disclosure must be made through the 

same means through which the 

communication is presented. In any 

communication made through both 

visual and audible means, such as a 

television advertisement, the disclosure 

must be presented simultaneously in 

both the visual and audible portions of 

the communication even if the 

representation requiring the disclosure 

is made in only one means. 

(2) A visual disclosure, by its size, 

contrast, location, the length of time it 

appears, and other characteristics, must 

stand out from any accompanying text 

or other visual elements so that it is 

easily noticed, read, and understood. 

(3) An audible disclosure, including 

by telephone or streaming video, must 

be delivered in a volume, speed, and 

cadence sufficient for ordinary 

consumers to easily hear and 

understand it. 

(4) In any communication using an 

interactive electronic medium, such as 

the internet, a mobile application, or 

software, the disclosure must be 

unavoidable. 

(5) The disclosure must use diction 

and syntax understandable to ordinary 

consumers and must appear in each 

language in which the representation 

that requires the disclosure appears. 

(6) The disclosure must comply with 

these requirements in each medium 

through which it is received, including 

all electronic devices and face-to-face 

communications. 

(7) The disclosure must not be 

contradicted or mitigated by, or 


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inconsistent with, anything else in the 

communication. 

(8) When the representation or sales 

practice targets a specific audience, 

such as children, older adults, or the 

terminally ill, ‘‘ordinary consumers’’ 

includes members of that group. 

Covered good or service means: 

(1) Live-event tickets; or 

(2) Short-term lodging, including 

temporary sleeping accommodations at 

a hotel, motel, inn, short-term rental, 

vacation rental, or other place of 

lodging. 

Government charges means the fees or 

charges imposed on the transaction by 

a Federal, State, Tribal, or local 

government agency, unit, or department. 

Pricing information means any 

information relating to an amount a 

consumer may pay. 

Shipping charges means the fees or 

charges that reasonably reflect the 

amount a business incurs to send 

physical goods to a consumer, including 

through the mail, private mail and 

shipping services, or by freight. 

Total price means the maximum total 

of all fees or charges a consumer must 

pay for any good(s) or service(s) and any 

mandatory ancillary good or service, 

except that government charges, 

shipping charges, and fees or charges for 

any optional ancillary good or service 

may be excluded. 

§ 464.2 Hidden fees prohibited. 

(a) It is an unfair and deceptive 

practice and a violation of this part for 

any business to offer, display, or 

advertise any price of a covered good or 

service without clearly and 

conspicuously disclosing the total price. 

(b) In any offer, display, or 

advertisement that represents any price 

of a covered good or service, a business 

must disclose the total price more 

prominently than any other pricing 

information. However, where the final 

amount of payment for the transaction 

is displayed, the final amount of 

payment must be disclosed more 

prominently than, or as prominently as, 

the total price. 

(c) A business must disclose clearly 

and conspicuously, before the consumer 

consents to pay for any covered good or 

service: 

(1) The nature, purpose, and amount 

of any fee or charge imposed on the 

transaction that has been excluded from 

total price and the identity of the good 

or service for which the fee or charge is 

imposed; and 

(2) The final amount of payment for 

the transaction. 

§ 464.3 Misleading fees prohibited. 

In any offer, display, or advertisement 

for a covered good or service it is an 

unfair and deceptive practice and a 

violation of this part for any business to 

misrepresent any fee or charge, 

including: the nature, purpose, amount, 

or refundability of any fee or charge; 

and the identity of the good or service 

for which the fee or charge is imposed. 

§ 464.4 Relation to State laws. 

(a) In general. This part will not be 

construed as superseding, altering, or 

affecting any State statute, regulation, 

order, or interpretation relating to unfair 

or deceptive fees or charges, except to 

the extent that such statute, regulation, 

order, or interpretation is inconsistent 

with the provisions of this part, and 

then only to the extent of the 

inconsistency. 

(b) Greater protection under State law. 

For purposes of this section, a State 

statute, regulation, order, or 

interpretation is not inconsistent with 

the provisions of this part if the 

protection such statute, regulation, 

order, or interpretation affords any 

consumer is greater than the protection 

provided under this part. 

§ 464.5 Severability. 

If any provision of this part is held to 

be invalid or unenforceable by its terms, 

or as applied to any person, industry, or 

circumstance, or stayed pending further 

agency action, the provision shall be 

construed so as to continue to give the 

maximum effect to the provision 

permitted by law and such invalidity 

shall not affect the application of the 

provision to other persons, industries, 

or circumstances or the validity or 

application of other provisions. If any 

provision or application of this part is 

held to be invalid or unenforceable, the 

provision or application shall be 

severable from this part and shall not 

affect the remainder thereof. 

By direction of the Commission, 

Commissioner Ferguson dissenting. 

Joel Christie, 

Acting Secretary. 

[FR Doc. 2024–30293 Filed 1–8–25; 8:45 am] 

BILLING CODE 6750–01–P 


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