IN THE SENATE OF THE UNITED STATES
September 27, 2016
Mr. Daines (for himself, Mr. Nelson, and Ms. Klobuchar) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation
To protect consumers from deceptive practices with respect to online booking of hotel reservations, and for other purposes.
This Act may be cited as the
Stop Online Booking Scams Act of 2016.
Findings; sense of Congress
Congress finds the following:
The Internet has become an important channel of commerce in the United States, accounting for billions of dollars in retail sales every year.
Hotel reservation transactions can be easily made online and online commerce has created a marketplace where consumers can shop for hotels, flights, car rentals, and other travel-related services and products across thousands of brands on a single platform.
Consumers should have the utmost clarity as to the company with which such consumers are transacting business online.
Actions by third-party sellers that misappropriate brand identity, trademark, or other marketing content are harmful to consumers.
Platforms offered by online travel agencies provide consumers with a valuable tool for comparative shopping for hotels and should not be mistaken for the unlawful third-party actors that commit such misappropriation.
The misleading and deceptive sales tactics companies use against customers booking hotel rooms online have resulted in the loss of sensitive financial and personal information, financial harm, and headache for consumers.
Sense of Congress
It is the sense of Congress that—
consumers benefit from the ability to shop for travel-related services and products on the innovative platforms offered by online travel agencies;
sellers on the Internet should provide consumers with clear, accurate information and such sellers should have an opportunity to compete fairly with one another; and
the Federal Trade Commission should revise the Internet Web site of the Commission to make it easier for consumers and businesses to report complaints of deceptive practices with respect to online booking of hotel reservations.
In this Act:
The term affiliation contract means, with respect to a hotel, a contract with the owner of the hotel, the entity that manages the hotel, or the franchisor of the hotel to provide online hotel reservation services for the hotel.
The term Commission means the Federal Trade Commission.
Exhibition organizer or meeting planner
The term exhibition organizer or meeting planner means the person responsible for all aspects of planning, promoting, and producing a meeting, conference, event, or exhibition, including overseeing and arranging all hotel reservation plans and contracts for the meeting, conference, event, or exhibition.
Official housing bureau
The term official housing bureau means the organization designated by an exhibition organizer or meeting planner to provide hotel reservation services for meetings, conferences, events, or exhibitions.
Party directly affiliated
The term party directly affiliated means, with respect to a hotel, a person who has entered into an affiliation contract with the hotel.
Third party online hotel reservation seller
The term third party online hotel reservation seller means any person that—
sells any good or service with respect to a hotel in a transaction effected on the Internet; and
a party directly affiliated with the hotel; or
an exhibition organizer or meeting planner or the official housing bureau for a meeting, conference, event, or exhibition held at the hotel.
Requirements for third party online hotel reservation sellers
It shall be unlawful for a third party online hotel reservation seller to charge or attempt to charge any consumer’s credit card, debit card, bank account, or other financial account for any good or service sold in a transaction effected on the Internet with respect to a hotel unless the third party online hotel reservation seller—
clearly and conspicuously discloses to the consumer all material terms of the transaction, including—
before the conclusion of the transaction—
a description of the good or service being offered; and
the cost of such good or service; and
in a manner that is continuously visible to the consumer throughout the transaction process, the fact that the person is a third party online hotel reservation seller and is not—
affiliated with the person who owns the hotel or provides the hotel services or accommodations; or
an exhibition organizer or meeting planner or the official housing bureau for a meeting, conference, event, or exhibition held at the hotel; or
includes prominent and continuous disclosure of the brand identity of the third party online hotel reservation seller throughout the transaction process, both online and over the phone.
Enforcement by Commission
Unfair or deceptive acts or practices
A violation of subsection (a) by a person subject to such subsection shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
Powers of Commission
The Commission shall enforce this section in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act.
Privileges and immunities
Any person who violates this section shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act (15 U.S.C. 41 et seq.).
The Commission may promulgate such rules as the Commission considers appropriate to enforce this section.
The Commission shall carry out any rulemaking under clause (i) in accordance with section 553 of title 5, United States Code.
Enforcement by States
In any case in which the attorney general of a State has reason to believe that an interest of the residents of the State has been or is threatened or adversely affected by the engagement of any person subject to subsection (a) in a practice that violates such subsection, the attorney general of the State may, as parens patriae, bring a civil action on behalf of the residents of the State in an appropriate district court of the United States to obtain appropriate relief.
Rights of Federal Trade Commission
Notice to Federal Trade Commission
Except as provided in clause (iii), the attorney general of a State shall notify the Commission in writing that the attorney general intends to bring a civil action under paragraph (1) before initiating the civil action against a person subject to subsection (a).
The notification required by clause (i) with respect to a civil action shall include a copy of the complaint to be filed to initiate the civil action.
If it is not feasible for the attorney general of a State to provide the notification required by clause (i) before initiating a civil action under paragraph (1), the attorney general shall notify the Commission immediately upon instituting the civil action.
Intervention by Federal Trade Commission
The Commission may—
intervene in any civil action brought by the attorney general of a State under paragraph (1) against a person described in subsection (d)(1); and
be heard on all matters arising in the civil action; and
file petitions for appeal of a decision in the civil action.
Nothing in this subsection may be construed to prevent the attorney general of a State from exercising the powers conferred on the attorney general by the laws of the State to conduct investigations, to administer oaths or affirmations, or to compel the attendance of witnesses or the production of documentary or other evidence.
State coordination with Federal Trade Commission
If the Commission institutes a civil action or an administrative action with respect to a violation of subsection (a), the attorney general of a State shall coordinate with the Commission before bringing a civil action under paragraph (1) against any defendant named in the complaint of the Commission for the violation with respect to which the Commission instituted such action.
Venue; service of process
Any action brought under paragraph (1) may be brought in—
the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code; or
another court of competent jurisdiction.
Service of process
In an action brought under paragraph (1), process may be served in any district in which the defendant—
is an inhabitant; or
may be found.
Actions by other State officials
In addition to civil actions brought by attorneys general under paragraph (1), any other officer of a State who is authorized by the State to do so may bring a civil action under paragraph (1), subject to the same requirements and limitations that apply under this subsection to civil actions brought by attorneys general.
Nothing in this subsection may be construed to prohibit an authorized official of a State from initiating or continuing any proceeding in a court of the State for a violation of any civil or criminal law of the State.