Australian competition watchdog goes up against Nasdaq giant. Here’s why

A businessman points a finger in accusation, indicating a share price or ASX company in troubleA businessman points a finger in accusation, indicating a share price or ASX company in trouble

Fan favourite NASDAQ-100 Index (NASDAQ: NDX) share, Airbnb Inc (NASDAQ: ABNB) is being dragged to the Federal Court by the Australian Competition and Consumer Commission (ACCC).

The competition watchdog announced it was taking legal action against the holiday letting platform, alleging it misled Australians over prices.

 Let’s take a closer look at why the Nasdaq giant is being taken to the top court of Australia.

Fan favourite Nasdaq share to hit the Federal Court

Nasdaq giant Airbnb has a US$78 billion market capitalisation and a share price of US$122.90. But not even giants escape the ACCC’s scrutiny.

The watchdog is taking the company to court on allegations it didn’t advertise the currency of its prices.

According to the ACCC, Airbnb displayed a dollar sign on its website and app without clarifying it represented US dollars not Australian dollars.

Thousands of customers were allegedly impacted between at least January 2018 and August 2021.

In the period in question, the average exchange rate between Australian dollars and US dollars was around 72 US cents. That means for a $500 booking, an Australian customer may have ended up paying almost $700.

The watchdog says on some occasions, Airbnb only revealed the price was in US dollars on the final page of the booking process, after the platform showed numerous dollar signs and once the accomodation was ‘reserved’.  

To top it off for the Nasdaq share, the ACCC claims the company continued to mislead or deceive complaining customers. It allegedly told impacted users they had opted to view US dollar values despite that often not being the case.

“Despite thousands of consumers complaining to Airbnb about the way prices were displayed, Airbnb didn’t amend its booking platform until after the ACCC raised the issue,” ACCC Chair Gina Cass-Gottlieb said, continuing:

Airbnb did not compensate many consumers who complained about this conduct …

We will be arguing that the court should order Airbnb to compensate people who were misled about the price of their accommodation.

The Airbnb share price is tumbled nearly 29% on the Nasdaq Index in 2022. For context, the Nasdaq Composite Index (NASDAQ: .IXIC) has also slumped 23%.

The Motley Fool Australia reached out to Airbnb for comment but didn’t receive a reply in time for publication.

The post Australian competition watchdog goes up against Nasdaq giant. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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