SG competition watchdog clamps down on price transparency of online travel firms

The Competition and Consumer Commission of Singapore (CCCS) has developed a set of guidelines on price transparency containing the "dos and don'ts" relating to various pricing practices in the online travel booking sector in Singapore.These guidelines will apply to both online and offline transactions, and aims to provide more clarity on what constitutes an infringement of the Consumer Protection (Fair Trading) Act (CPFTA) and how suppliers should display and advertise prices in a clear manner. Through this, CCCS aims to educate suppliers and reduce misleading pricing practices.The proposed guidelines by CCCS on price transparency recommendations, with respect to how suppliers should display and advertise their prices, include:Drip pricing and pre-ticked boxes: Suppliers should ensure that any unavoidable or mandatory fees/charges (eg. taxes, surcharges) are included in the total headline price. As good practice, suppliers should avoid using pre-ticked boxes to automatically include add-ons. If pre-ticked boxes are used, suppliers must provide proper disclosures of the goods or services offered in a clear and prominent manner.Price comparisons (with other suppliers): When comparing their price with others, suppliers should ensure that any representations and price comparisons with other suppliers’ prices or the use of terms such as cost price, are not false or misleading.Discounts: When comparing their price with a previous price to represent a discount, suppliers should use an actual, bona fide previous price (i.e. usual price) that provides a legitimate basis for the price comparison.Use of the term “free”: When using the term “free”, suppliers should ensure that any representation that the price is SG$0 or “free” is not false or misleading and any qualifiers, terms and conditions as well as subsequent/deferred charges should be stated upfront clearly and prominently.The competition watchdog also recommends online travel booking providers to adopt transparent pricing practices, such that prices and accompanying terms and conditions are communicated clearly. According to CCCS, this will enable consumers to make an informed choice and allow businesses to compete on a level playing field.Meanwhile to avoid misleading consumers, the competition watchdog is seeking public feedback on the proposed guidelines. The general public are invited to provide feedback on the proposed guidelines on price transparency by 21 October 2019.The set of guidelines come after a market study conducted by CCCS identified four common practices of online travel booking providers that give rise to consumer protection concerns. These include drip pricing that does not disclose both mandatory and optional charges upfront, pre-ticked boxes that results in consumers buying unwanted add-on products, strikethrough pricing misleading consumers into making a purchase should the comparison between a current and a crossed-out price be false, as well as pressure selling which creates a false sense of urgency for consumers to make a purchase based on inaccurate information.The study was conducted citing a Google-Temasek report which concluded that the online travel booking segment in Southeast Asia was worth US$19.4 billion in 2015, accounting for 61% of the internet economy in Southeast Asia. Between 2015 and 2018, online travel booking grew at 15% driven by growth in online airline and hotel bookings, to a size of US$29.7 billion in 2018. Singapore was estimated to be the third largest in Southeast Asia in terms of online booking market value in 2018, with the highest per-capita online travel booking expenditure in the region. According to the report, by 2025, the online travel booking market in Southeast Asia is estimated to reach US$78 billion.The research covering six Southeast Asian markets - Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam - revealed that Singapore consumers are increasingly turning to online channels in making their travel bookings, including searching for, comparing, and purchasing travel-related products such as air tickets and hotel accommodation online, whether directly from the websites of service providers, online travel agents, or web aggregators.(Photo courtesy: 123RF)