Key points

• The FTC's rule on unfair or deceptive fees, in effect since May 2025, requires all-in pricing for live-event tickets and short-term lodging, including hotels, vacation rentals and similar stays.
• Beyond that rule, the FTC Act, state laws and attorney general enforcement apply drip pricing principles to retail and other sectors. California and Minnesota, among others, have specific statutes.
• In the United Kingdom, the Digital Markets, Competition and Consumers Act 2024 expressly treats hidden mandatory fees as a banned practice, and the CMA can now fine up to 10 percent of global turnover.
• The central question is simple: is the total price a consumer must pay shown upfront and prominently? Fees disclosed only at the last checkout step are the riskiest.
• Reviewing price display across web, app, third-party marketplaces and advertising is the fastest way to reduce exposure.

What drip pricing is and why regulators care

Drip pricing is the practice of advertising a low headline price and adding mandatory charges as the customer moves through a purchase. Service fees, resort fees, delivery fees, processing fees and facility charges are typical examples. Regulators in the United States, the United Kingdom and the European Union treat it as a problem because it prevents consumers from comparing prices accurately and because, once a consumer has invested effort in a transaction, they are less likely to abandon it.

The FTC rule on unfair or deceptive fees

The FTC finalized its rule in late 2024, and it took effect in May 2025 after the agency narrowed its scope from the proposal. It applies to two sectors only: live-event tickets and short-term lodging. For those businesses, the rule requires that the total price, including all mandatory fees, be displayed clearly and conspicuously whenever a price is offered or displayed, and that the nature and purpose of any optional or government-imposed charges be disclosed before the consumer pays. It also prohibits misrepresenting the nature or purpose of any fee.

Venues, ticketing platforms, hotel operators and online travel intermediaries all have to consider whether they are covered. The rule reaches both the business that sets the price and the business that displays it, which matters where inventory is resold or syndicated across channels. Civil penalties are available for violations of a trade regulation rule, which makes the exposure materially different from a general deception case.

Retail and other sectors are not exempt

Outside live events and lodging, the same conduct is still actionable under Section 5 of the FTC Act and state unfair and deceptive practices laws. State attorneys general have taken the lead. California's price transparency statute, effective in 2024, requires that advertised prices include all mandatory fees other than government taxes and shipping, and Minnesota enacted a comparable law taking effect in 2025. Other states have bills pending or have used existing law to pursue restaurants, food delivery and entertainment businesses.

Retailers should note two recurring fact patterns. First, mandatory handling or service fees added at checkout for marketplace or delivery orders. Second, membership or subscription fees presented as optional but effectively required to access the advertised price. Both are risky when the headline price implies that no additional mandatory cost applies.

United Kingdom and European Union

The Digital Markets, Competition and Consumers Act 2024 replaced the Consumer Protection from Unfair Trading Regulations 2008 with a similar but modernized regime and added the CMA's direct enforcement and fining powers. Under that Act, a business that advertises a price must include all mandatory fees and charges in the headline price, and has to present the total price clearly. These provisions came into force in April 2025. The CMA has already opened enforcement cases in sectors including ticketing and accommodation, and the Advertising Standards Authority applies equivalent expectations under the advertising codes.

In the European Union, the Consumer Rights Directive and the Unfair Commercial Practices Directive require total price disclosure, and national regulators have pursued drip pricing in airline, ticketing and online travel cases. Retailers selling across borders should expect national differences in how mandatory fees and local taxes are displayed.

A practical review

• Inventory every fee. List each charge added to a purchase and decide whether it is truly optional or avoidable. If it is not, it belongs in the headline price.
• Test every channel. Check price display on the website, mobile app, email, search advertising, comparison sites and marketplaces, including partner pages you do not control.
• Review fee labels and explanations. A fee described as a government charge when it is retained by the business is a misrepresentation risk in its own right.
• Update contracts with distributors and affiliates. Require them to display all-in pricing and give you the right to correct or remove noncompliant listings.
• Keep records. Preserve screenshots of each price display with dates and the legal advice behind it.

Businesses that operate in several sectors, such as a retailer that also sells event tickets or travel packages, should apply the stricter standard across the whole company. Applying one pricing display standard is operationally simpler and removes the risk of a sector-specific rule catching an unreviewed flow.

Early engagement with regulators is worth considering where a pricing model has changed recently. Both the FTC and the CMA have rewarded businesses that self-correct promptly and cooperate, and a documented remediation plan can significantly reduce penalties.