President Joe Biden on Wednesday will ask Congress to pass legislation that would crack down on so-called junk fees — hidden costs in airline and concert tickets, vacation packages, and television and phone bills.
Biden’s proposal would eliminate exorbitant fees for concert and sporting event tickets, which can make up more than 20% of ticket prices; ban airlines from charging extra for family members to sit with their children; eliminate the “exorbitant” fees for canceling television and early phone packages, which can be above $200; and require hotels and resorts to disclose nightly resort fees to consumers upfront.
“This will not only save Americans billions every year, but make our markets more competitive – creating a more level playing field so that businesses that price fairly and transparently do not lose sales to companies that disguise their true prices with hidden fees,” the government wrote in a fact sheet explaining the proposal.
The government estimates that this and other waste costs cost the United States billions of dollars every year.
Biden is set to announce the proposed legislation at a meeting of the administration’s competition council, which has been working to increase antitrust enforcement and challenge corporate concentration since it was created by executive order in July 2021.
The administration is set to roll out two more announcements at Wednesday’s meeting: a crackdown on credit card late fees and a report on how Congress should approach regulating online app stores.
The Consumer Financial Protection Bureau is set to propose rules that would bar credit card companies from charging late fees that exceed the cost of collecting late payments, which the agency estimates could save consumers $9 billion a year.
The bureau wants to lower the maximum late fee from $41 down to $8, and limit the late fee to 25% of the customer’s minimum credit card payment.
“Over a decade ago, Congress banned excessive late credit card fees, but companies have exploited regulatory loopholes that have allowed them to escape scrutiny to charge fees that are used illegally,” said Rohit Chopra, director of the agency. “Today’s proposed rule seeks to save families billions of dollars and ensure a fair and competitive credit card market.”
Chopra told reporters on a conference call previewing the announcement that the rule could be implemented by 2024.
Finally, the National Telecommunications and Information Administration released a report on how to increase competition in the app economy. The report recommends many of the measures included in the Open App Markets Act, which failed to pass Congress last year amid intense lobbying efforts from Apple and Google – the two companies that dominate the app market.