U.S. Considers Weakening Consumer Protections Against Airlines

The U.S. Department of Transportation wants to “clarify” what constitutes “unfair and deceptive practices” when it comes to airlines and travel agencies. I’m not expecting this to end well…

The DOT has widespread statutory power to prevent “unfair and deceptive practices” by airlines. It has historically exercised that power to mandate airlines display all-in pricing throughout the booking process, regulate tarmac delays, and prohibit post-purchase price increases, even for so-called mistake fares.

But there’s a new sheriff in town and it looks like the DOT will finally start whittling away at these protections. The DOT argues it is re-examining essential discounts to “benefit the public and regulated entities by providing more clarity and certainty of what constitutes an unfair or deceptive practice.”

In theory, such clarification is helpful. It will hold airlines accountable if they know exactly when they have run afoul of the rules. But if “unfair” and “deceptive” is eviscerated of all meaningful value, there might be clarity, but airline consumers will be greatly hurt.

Note what else the DOT says about the potential change in definition:

“It would also codify the practice of offering airlines and ticket agents the opportunity to be heard and to present relevant evidence before the Department takes any enforcement action for an alleged unfair or deceptive practice.”

Again, in theory this isn’t bad…if the DOT serves as a neutral arbiter. But already the DOT is reluctant to act and cannot compel consumer compensation, only fine airlines. The practical effect of allowing more dialogue between parties may grind any adjudication to a halt.

Even more distributing, the point of all this is not to protect consumers, but limit DOT power.

“This proposal will help ensure that the Department’s enforcement practices and regulations stay within the scope of the Department’s statutory authority.”

That is a polite way of saying that the DOT wishes to take a more hands-off approach to airline regulation.

What Is An Unfair And Deceptive?

In issuing a Notice of Proposed Rulemaking, the Department of Transportation is statutorily required by the Administrative Procedure Act to seek public comment.

Over the time, the terms unfair and deceptive have gained more definitive legal meaning:

An act or practice is unfair where it:

• causes or is likely to cause substantial injury to consumers;
• cannot be reasonably avoided by consumers; and
• is not outweighed by countervailing benefits to consumers or to competition.

An act or practice is deceptive where:

• a representation, omission, or practice misleads or is likely to mislead the consumer;
• a consumer’s interpretation of the representation, omission, or practice is considered reasonable under the circumstances; and
• the misleading representation, omission, or practice is material.

These elements are deliberately broad, as a definition cannot possibly encompass all specific applications. I’m not sure how the DOT can “clarify” what constitutes unfair or deceptive practices when general legal definitions must be applied to new and relevant facts.

CONCLUSION

U.S. Transportation Secretary Elaine L. Chao said, “This proposal is intended to provide greater clarity in the interpretation of what constitutes unfair or deceptive practices; we look forward to the public’s comments.”

Unfortunately, I think the DOT will use this change to limit its own power and give airlines more freedom to act without fear of negative regulatory repercussions. Specifically, I question whether all-in pricing requirements or tarmac delay rules will survive. Whatever your political persuasion, that is not good news.

> Read More: Six Consumer Protections Airlines Hope to Eliminate
> Read More: Why Congress Should Mandate All-In Pricing for Hotels Too

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