Guarding Consumers' Pocketbooks

The Commission works to preserve competition for goods and services that consumers buy every day. This year, for instance, the Commission required Hertz to sell its Advantage Rent-A-Car business, as well as the rights to operate 29 Dollar Thrifty on-airport locations, to resolve charges that Hertz’s $2.3 billion acquisition of Dollar Thriftywould have forced consumers to pay higher prices for rental cars at 72 airports around the country. For similar reasons, the FTC required a supermarket chain to divest a store near Philadelphia to preserve competition for food shoppers in that area.

The Commission also studies trends in marketing. For example, the Commission convened a group of economists and marketing academics to examine the use of drip pricing and its impact on consumers. Drip pricing is a technique in which firms advertise part of a product’s price and reveal additional charges later as the customer goes through the buying process; it is used by many firms, including hotels, internet sellers, automobile dealers, financial institutions, and rental car companies. A common complaint at the conference involved “resort fees,” and charges for amenities like newspapers or internet access that are mandatory, regardless of whether the hotel customer uses the services. Following a subsequent review, the FTC sent letters to 22 hotel operators warning that reservation price quotes that exclude resort fees and other mandatory surcharges may violate the law by misrepresenting the price consumers can expect to pay for their hotel rooms.

The Commission also hosted a workshop focusing on competition and consumer protection issues in the pet medications industry. American consumers spend an estimated $50 billion annually on their pets, including $7 billion for prescription and over-the-counter medications. Workshop participants gathered to consider how current industry distribution and other business practices affect consumer choice and price competition for pet medications, as well as the ability of consumers to obtain written prescriptions that they can fill where they choose. Participants also discussed how to inform and empower consumers to get the highest quality and most cost-effective healthcare products for their pets.