The Australian Competition and Consumer Commission is suing accommodation giant Airbnb for allegedly misleading customers about prices.
The ACCC alleges between January 2018 and August 2021, Airbnb displayed prices on its website for Australian accommodation without making it clear the currencies were in US dollars.
When thousands of people complained to Airbnb about being overcharged, the company allegedly falsely told many they had selected the US currency.
During that period, an Australian customer who believed they were paying $500 for a booking would have instead be slugged with almost $A700 before conversion fees.
The commission filed the claim in Federal Court on Tuesday, seeking compensation for guests who were overcharged as well as penalties.
ACCC chair Gina Cass-Gottlieb said Airbnb itself had identified about 2000 customer complaints over the three-and-a-half year period.
"By taking this action, the ACCC wants to make clear to all digital platforms like Airbnb that when they make representation to Australian consumers they must be accurate and clear," she told reporters on Wednesday.
"We certainly want companies to know that we're a tough regulator and intend to take action ... They need need to comply with our law".
She urged users to report complaints to the watchdog if they paid more than the price displayed.
"We are seeking higher penalties because we're well aware of not only the global turnover of these major corporations but also the turnover that they make in Australia," she said.
Airbnb said the allegations put forward by the regulator only impacted a small number of its customers.
"While a fraction of a percentage of guests are believed to have been impacted, we were nonetheless extremely disappointed to have found that this occurred and we will compensate affected guests," Airbnb's Australia and New Zealand country manager Susan Wheeldon said.
"Upon this issue being brought to our attention by the ACCC, we worked to update our platform so that the relevant currencies are clearly displayed from the first page for all Australian guests booking stays on our platform".
The commission sued Mastercard last month for "anti-competitive conduct" and reached a settlement with Uber penalising them $26 million in April for misleading users over fares and cancellation warnings.