By Paul Prentice | SOURCE: THE GAZETTE
In a misguided effort to protect consumers, the Biden administration has embarked on a well-intentioned but ill-advised crusade against what it deems to be “hidden” and “junk” fees. This initiative, while ostensibly aimed at promoting transparency and fairness, overlooks the nuanced economic landscape in which small and medium-sized businesses operate, particularly in states like Colorado.
President Joe Biden kicked off this campaign during his 2023 State of the Union address, where he called out industries for allegedly deceiving consumers. Touting his desire to crack down on “junk fees,” he attacked airlines, hotels, cable companies, and concert venues for billing consumers extraneous back-end costs, employing the catchy tagline that airlines would no longer be able to “treat your children like a piece of luggage.”
Today these regulatory efforts have culminated in a proposed rule from the Federal Trade Commission seeking to “prohibit unfair or deceptive practices relating to fees for goods or services,” across the entire economy. The proposal invites debate regarding the scope of their oversight and how an economywide rule might impact businesses with narrow profit margins.
While no one likes being blindsided by hidden fees, the administration’s heavy-handed government approach to erase them will not necessarily benefit consumers, nor will it leave small and medium sized businesses unscathed. Industries impose fees for different reasons, but the administration’s one-size-fits-all approach to fee regulation fails to recognize the unique challenges and operational models of these enterprises.