The European Union told Airbnb on Monday to bring its terms and conditions into line with the bloc's consumer rules or face action by national consumer agencies, after a review of the short-term rental platform found some violations.
Some of Airbnb's terms and the way it presents its prices breach the bloc's unfair commercial practices directive, the unfair contract terms directive and the regulation on jurisdiction in civil and commercial matters, the EU executive said.
San Francisco-based Airbnb and similar rental platforms, which help homeowners rent out their homes or rooms for short periods, have grown in popularity in recent years because of their competitive prices in comparison with hotels.
"But popularity cannot be an excuse for not complying with EU consumer rules. Consumers must easily understand ... how much they are expected to pay for the services and have fair rules for example on cancellation of the accommodation by the owner," EU Justice Commissioner Vera Jourova said in a statement.
The company has until the end of August to present its proposals for responding to the criticism which will then be reviewed by the Commission and national consumer authorities. It could face fines if it does not comply with EU rules.
The EU executive said Airbnb should state whether accommodation is offered by a private individual or a professional, provide details of the price in a clear way and modify its terms of service to make them fairer to consumers.
Airbnb said it was working to be as transparent as possible.
"Guests are made aware of all fees, including service charges and taxes, prior to confirming their decision to book a listing, and we will work together with the authorities to clarify the points raised," the company said in a statement.
The issue came to light after national consumer agencies in June examined Airbnb's business practices published in different languages.
Rental platforms have come under fire for driving up property prices and contributing to a housing shortage in Paris, Berlin, Amsterdam and other big cities.
© Thomson Reuters 2018