Top Biden advisor: Regulating junk fees is popular and 'also smart economics'

·4 min read

The White House wants to keep talking about junk fees.

Its latest effort to focus on the issue came Tuesday afternoon at a White House gathering where Biden’s top economic advisor, Lael Brainard, kicked off a panel discussion by laying out the economic case for banning those annoying add-ons that "sneak up on" Americans.

“Junk fee regulation isn’t just popular and it isn’t just a real cost savings, it’s also smart economics,” Brainard said Tuesday afternoon.

The gathering marks the latest step in an initiative this year that included a call for action during President Biden's State of the Union address. Other moves include legislation currently before Congress as well as ongoing rule-making efforts at agencies like Biden's Transportation Department.

Tuesday's event also included a bipartisan panel of academics and businesspeople including David Laibson, a professor of economics at Harvard University, and Laura Dooley, an executive at StubHub.

WASHINGTON, DC - MARCH 01: Lael Brainard, Vice Chair of the Federal Reserve, attends an event where U.S. President Joe Biden  announced Julie Su as his nominee to be the next Secretary of Labor during an event in the East Room of the White House March 1, 2023 in Washington, DC. Su will replace the current Secretary of Labor, Marty Walsh.  (Photo by Win McNamee/Getty Images)
Lael Brainard joined the White House as Assistant to the President & Director of the National Economic Council, in February. (Win McNamee/Getty Images)

Professor Laibson discussed how companies “are innovatively tricking consumers instead of innovatively serving them ... They shroud the true cost of goods and services and undermine the competitive forces that would normally raise societal wellbeing."

Vicki Morwitz, a behavioral scientist at Columbia University, and William Kovacic, a former official at the Federal Trade Commission, also appeared Tuesday afternoon.

A focus on fees when buying tickets

The ticketing sector is one of the most notorious ones for last-minute fees, with reports that a ticket can sometimes quadruple in price once processing and servicing fees, among others, get added at the end of a transaction.

Dooley, who is the head of government relations at StubHub, focused her remarks Tuesday how the fees can become entrenched and even put a company at a competitive disadvantage if it tries to avoid them.

She said her company tried to move to “all-in pricing” in 2014, but was forced to backtrack when the industry did not follow suit and buyers were confused and assumed that StubHub was simply more expensive.

“This experience has driven our perspective that federal legislation or rule-making is not just necessary, but it's critical to implementing all-in pricing standard equitably across our industry,” Dooley said.

Ticketmaster has come under the most withering scrutiny in recent months for what its critics say are a host of anticompetitive practices — including excessive fees — after its merger with LiveNation.

WASHINGTON, DC - JANUARY 24: Amy Edwards and Parker Harrison demonstrate against the live entertainment ticket industry outside the U.S. Capitol January 24, 2023 in Washington, DC. The Senate Judiciary Committee is holding a hearing this morning to explore whether the merger of Live Nation and Ticketmaster has stifled competition and harmed the consumer marketplace. (Photo by Drew Angerer/Getty Images)
Demonstrators against the live entertainment ticket industry gathered outside the U.S. Capitol in January. (Drew Angerer/Getty Images)

LightShed Partners Media and Technology Analyst Brandon Ross recently joined Yahoo Finance Live to discuss the controversy that has centered around companies like Ticketmaster and their fees.

"I think what needs to be done is real transparency for the consumer," Ross said.

Just the latest event from the White House

For Brainard, headlining the event on the issue comes just after weeks after assuming the role of White House National Economic Council Director and replacing Brian Deese, who was a key, early voice championing the Biden administration's focus on fees.

A host of sectors that impose fees — from airlines to landlords and banks — have gained the Biden administration's ire in recent months. White House officials say that a combination of Congressional action and the presidential bully pulpit can cut into the fees Americans pay and give them more “breathing room.”

On Capitol Hill, the most expansive bill under consideration is called the Junk Fee Prevention Act that would tackle four types of fees at once: those around live concerts and sporting events; cable TV and internet services; resort and destination fees; and airline fees when a family wants to sit together.

A few weeks ago, the White House convened a virtual gathering of state legislators to prod for state-level action on the issue as well, as part of what they describe as a government-wide effort.

This post has been updated.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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