ICYMI: President Biden's Crack Down on Junk Fees Is Lowering Costs and Gaining Momentum

This week, the Federal Communications Commission and Federal Trade Commission announced new steps to assist consumers and the White House convened academic leaders and practitioners to discuss the strong economic arguments for regulating junk fees.

As President Biden said in his State of the Union this year, the Biden-Harris Administration is "taking on junk fees, those hidden surcharges too many companies use to make you pay more." Actions announced this week highlight the Administration's commitment to ensuring that hardworking Americans get a fair and transparent price and aren't tricked into paying more than they bargained for. These actions build on steps that the Administration has already taken, including to reduce credit card late fees and overdraft fees, encourage companies to eliminate family seating fees for air travel, and make internet prices clearer for shoppers—actions that will give breathing room to hardworking families.

This week, the White House hosted a bipartisan discussion on the strong economic benefits of regulating junk fees and the body of academic literature that underpins the Administration's policy proposals. Academics, experts, and practitioners discussed how practices like drip pricing and partition pricing trick consumers and weaken market competition. The Federal Communications Commission introduced a proposal that would require cable providers to display total, "all-in" prices clearly and prominently, so consumers know what they are getting and at what price. And finally, the Federal Trade Commission released a proposed rule to make it easier for consumers to cancel subscriptions, ensuring that they aren't wasting money on services that they no longer want or need and wasting time navigating overly complicated unsubscribe processes.

See below for highlights on progress on President Biden's junk fees agenda from this week:

Economists say regulating junk fees is not just popular, it's smart economics

CNBC: Junk fees cost consumers tens of billions annually, according to the White House: "Fees on concert tickets, airfares, hotels and other so-called junk fees cost Americans tens of billions of dollars every year, often obscuring the full price of purchases from consumers, top economic experts said at the White House on Tuesday. 'They take real money out of the pockets of families, and they can distort competition in many markets,' Lael Brainard, director of the National Economic Council, said in comments prepared for delivery at a panel discussion spotlighting President Joe Biden's call on industries and regulators to cut junk fees."

Yahoo Finance: Top Biden advisor: Regulating junk fees is popular and 'also smart economics': "Tuesday's event also included a bipartisan panel of academics and businesspeople including David Laibson, a professor of economics at Harvard University, and Laura Dooley, an executive at StubHub. Professor Laibson discussed how companies 'are innovatively tricking consumers instead of innovatively serving them ... They shroud the true cost of goods and services and undermine the competitive forces that would normally raise societal wellbeing.' Vicki Morwitz, a behavioral scientist at Columbia University, and William Kovacic, a former official at the Federal Trade Commission, also appeared Tuesday afternoon.

Federal Communications Commission proposes to improve transparency of cable fees and services

Digital TV Europe: FCC aims to mandate 'all-in' cable and pay TV pricing: "The FCC said that the proposal aims to eliminate the misleading practice of describing these video programming costs as a tax, fee, or surcharge. The watchdog believes that the 'all-in' pricing format will allow consumers to make informed choices, including the ability to comparison shop among competing providers and to compare programming costs against alternative programming providers, including streaming services."

Making it easier for consumers to cancel recurring charges:

NPR: Still trying to quit that gym membership? The FTC is proposing a rule that could help: "Among other changes, the 'Click to Cancel' provision would require sellers to make it just as easy for customers to leave subscriptions — to everything from cosmetics to gym memberships to newspapers — as it is to enroll. It also aims to give consumers a clearer idea of what exactly they're signing up for in advance, so they don't feel 'tricked or trapped into subscriptions,' as [FTC Chair] Khan put it."

More Perfect Union: Video with FTC Chair Lina Kahn "The FTC is taking aggressive action to stop one of the biggest business scams – "click to subscribe, call to cancel."