U.S. Department of Transportation Issues Final Rule Providing Clarity on Unfair and Deceptive Practi

The U.S. Department of Transportation today announced that it has issued a final rule codifying its longstanding definitions for the terms "unfair" and "deceptive" when the Department uses its statutory authority to prohibit unfair or deceptive practices by airlines or ticket agents. Most of the Department's aviation consumer protection regulations, such as the Department's tarmac delay rule and rules on overbooking, are based on the Department's authority to prohibit unfair or deceptive practices.

As defined by the final rule, a practice is "unfair" to consumers if it causes or is likely to cause substantial injury, which is not reasonably avoidable, and the harm is not outweighed by benefits to consumers or competition. The final rule also states that a practice is "deceptive" to consumers if it is likely to mislead a consumer, acting reasonably under the circumstances, with respect to a material matter. A matter is material if it is likely to have affected the consumer's conduct or decision with respect to a product or service. Proof of intent is not necessary to establish unfairness or deception.

The rule will benefit the public and regulated entities by providing greater transparency and predictability on how the Department conducts its aviation consumer protection rulemaking and enforcement activities. It explains that future discretionary regulations based on the unfair and deceptive standard will be subject to a hearing procedure. It also codifies the practice of offering airlines and ticket agents the opportunity to be heard and to present relevant evidence before the Department takes any enforcement action for an alleged unfair or deceptive practice. This rule will help ensure that the Department's enforcement practices and regulations stay within the scope of the Department's statutory authority.