Did Donald Trump just kill passenger rights?
Administration's 11th-hour regulation could change air travel forever
Depending on who you talk to, a surprise new airline regulation announced late Friday will either give travelers "greater transparency" — or it will be the end of passenger rights as we know them.
The new regulation looks so benign that it's easily dismissed. The federal government, which regulates airlines in the United States, issued the final rule that defines the terms “unfair” and “deceptive.”
The Department of Transportation, which issued the rule, says it will help consumers by "providing greater transparency and predictability on how the department conducts its aviation consumer protection rulemaking and enforcement activities."
In other words, people will better understand when the government will — and won't — step in to help air travelers.
That's nonsense, say consumer advocates. It's an 11th-hour attempt by the Trump administration to finalize an airline-friendly regulation that could undo every modern consumer protection. And if it's successful, it's the death of passenger rights.
So which is it?
What the new rule says
The new rule looks so harmless and obvious, you would never suspect a darker motive.
What's "unfair"? According to the DOT, a practice is considered “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."
What's "deceptive"? The rule also says 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."
What's "material"? DOT also defines a "material" matter "if it is likely to have affected the consumer’s conduct or decision with respect to a product or service."
Who did this?
Who would want to define these words? The answer is deep in the Federal Register.
On page 3 of the final rulemaking document, it reveals who is behind this. In 2017, the Trump administration asked for suggestions for undoing "burdensome" regulations.
"In response to the Notice, Airlines for America (A4A), an airline trade association, urged the department to adopt policies defining unfairness and deception," according to the DOT.
The airline industry wanted to reset the standards for unfair and deceptive practices to match those used by the Federal Trade Commission (FTC).
The FTC standards contain three elements. An act or practice is unfair if it:
causes or is likely to cause substantial injury to consumers
can't be reasonably avoided by consumers
is not outweighed by countervailing benefits to consumers or to competition.
The FTC also considers public policy, as established by statute, regulation, judicial decisions, and other evidence, in determining whether an act or practice is unfair.
The DOT rushed this rulemaking through, cutting off public comments and fast-tracking the regulation so that it could get finalized before the Trump administration ends. And that brings us to now, when consumer advocates are having a collective freakout.
"DOT has already received more than 75,000 consumer complaints about airlines failing to obey refund regulations," says Charlie Leocha, president of Travelers United. "Airline anti-consumer, unfair and deceptive practices regarding refunds of airfares during the COVID-19 pandemic continue today. This is not a time to reward airlines for unlawful behavior and to decrease passenger protections."
FlyersRights.org was livid:
The National Consumers League agreed.
"The DOT's decision, at the height of a pandemic, to kneecap its ability to protect millions of travelers from airline industry abuses, is deeply disappointing," John Breyault, a vice president at NCL, said. "That the Department decided to do so on the Friday after Thanksgiving highlights that they hope this terrible decision will be forgotten by Monday."
He said it should be clear to every member of the flying public that current DOT leadership is focused squarely on doing the airline industry's bidding between now and January 20.
"It will be incumbent on the next administration to undo this rule, along with so many other anti-consumer actions taken over the past four years," he added.
The truth about this new rule
Hang on. What's the harm in defining a few terms?
First, it's important to note one fact: I've been advocating for air travelers for the better part of three decades, and I've never heard from a passenger who said, "Gee, Chris, I'd love it if the DOT could provide greater transparency and predictability on how the department conducts its aviation consumer protection rulemaking and enforcement activities."
No passenger asked for this. Ever.
Second, let's look at the FTC, with its stricter definition of "unfair" and "deceptive." The last time it handled a significant travel case, hotel resort fees, it dropped the ball. The bar for proving something is "unfair and deceptive" is so high that the FTC can only bring hardened criminals to justice, not major companies deceiving their customers.
Consumer advocates believe these FTC-like definitions of "unfair" and "deceptive" will hamstring future consumer regulations. But they'll also lead to the undoing of every modern passenger protection, including the 24-hour rule, the tarmac delay rule, and the full fare rule, which requires that an airline display the entire fare upfront.
These regulations won't go away overnight. Instead, the airlines will take each of these regulations to court, arguing that they don't meet the requirements for an "unfair and deceptive" practice. And they would be entirely correct.
If the consumer advocates are correct, then the airlines have just created a backdoor that will allow them to rewind the clock 20 years when it comes to consumer protections. And the Trump administration has given the industry its biggest gift since deregulation.
How to stop this (if you want to)
Congress has until Jan. 20 to stop the passenger rights apocalypse. There's also a chance that a new rule during the Biden administration could reverse this action, although it would take years of regulatory maneuvering to fix it.
Then again, nothing could change. At least, that's what the DOT would want you to believe. It notes that the rule will only ensure that the department’s enforcement practices and regulations stay within the scope of its statutory authority.
But with just four enforcement actions this year, a record low, does it really need new guardrails?
I'd love to hear from anyone who voted for Trump in the last election. Do you agree that an activist DOT needed to be stopped? Or has this rulemaking gone too far for you? All others, please feel free to chime in, no matter who you voted for. Is this rulemaking just a minor adjustment or the end of everything, in your opinion?