Airbnb Inc. was warned by the European Union to expect a regulatory clampdown unless its terms and conditions and the way it presents holiday-home prices comply with EU standards by the end of August.

The online platform must present pricing information in a more transparent way and make the distinction between private and professional hosts clearer to consumers, the European Commission said in a statement on Monday.

“Popularity cannot be an excuse for not complying with EU consumer rules,” said EU Commissioner for Consumers Vera Jourova. “Consumers must easily understand what for and how much they are expected to pay for the services and have fair rules e.g. on cancellation of the accommodation by the owner.”

Airbnb burst onto the scene a decade ago by persuading millions of people to open up their homes to strangers — starting a trend for adventurous vacationers looking for unique and cheap accommodations. It’s faced criticism, including from landlords, of violating zoning laws and operating as an illegal hotel. Critics have also said abundant short-term rentals drive up housing costs and disrupt neighborhoods.


“We take this issue seriously and are committed to being as transparent as possible for our community,” Airbnb said in a statement. “Guests are made aware of all fees, including service charges and taxes, prior to confirming their decision to book a listing, and we will work together with the authorities to clarify the points raised.”

Airbnb’s terms and conditions need to be made fairer and more understandable to consumers, according to the EU authority, which urged the company to present changes “swiftly” ahead of a review by regulators.

Airbnb has to either change or remove illegal terms in its terms of service, the commission said. These include that the San Francisco-based company can no longer “decide unilaterally and without justification” which terms remain in effect after a contract is ended, or deprive consumers “from their basic legal rights to sue a host” if they suffer personal harm or other damages, the EU authority said.

The EU’s consumer arm lacks the teeth of other parts of the European Commission, such as the antitrust department headed up by Margrethe Vestager. That led to frustration when it was relatively powerless to impose tough sanctions on Volkswagen AG in the wake of the diesel-emissions scandal.

Jourova told reporters on Monday it’s time to “evaluate the actions” by the carmaker to help affected owners.

“The rate of repair is now reaching 80 per cent,” Jourova said adding that “quite good news” for consumers is that the carmaker “committed to continuing the free-of-charge update until the end of 2020.”