The Fair Trade Commission said Thursday that it decided to charge the Irish office of global lodging giant Airbnb for ignoring the corrective orders on its contractual terms on cancellation penalty.

This is the first time that the watchdog is to file a charge against a foreign business operator over noncompliance with the domestic act on the regulation of terms and conditions.



In November last year, the FTC ordered Airbnb to correct the damage compensation clause which imposes a 50 percent penalty on users who cancel their reservation with seven or more days remaining to the lodging date.

The company then revised its terms to allow a 100 percent refund to cancellations made 30 days or more ahead of the lodging date and a 50 percent refund to those made afterwards.

The service provider, however, kept the renewed term hidden from lodging hosts in Ireland and only informed them of the new rule when a Korean user made a reservation, the FTC said.

“The system may take a toll on Korean consumers as lodging hosts may reject the reservation calls (by Korean users) when they face a sudden alteration in terms,” said an official of the FTC, calling it a clear noncompliance to the order.

Airbnb refuted the charge, claiming it had carried out the required revision in due time.

"Unlike the FTC's claim, the lodging hosts are given notice of the revised refund rules from the start, whenever Korean customers make reservations," said an official of the company.

Also, it is not within the authority of the South Korean watchdog to demand that the cancellation fee regulation be changed for all global customers, he added.

"We made the change for Korean users, as ordered, but we provide service in 191 countries around the world and it is incomprehensible that one state should ask all others to change their respective rules."

By Bae Hyun-jung (tellme@heraldcorp.com)