'Bait-and-Switch' Class Action Filed Against Expedia, HomeAway.com

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Expedia and HomeAway.com are facing a class action out of Texas alleging the companies engaged in a “classic bait-and-switch” scheme with users who listed their vacation properties for rental on its websites, as well as renters looking to book the listings. The lawsuit summarily claims both Expedia and HomeAway.com advertised and marketed premium listing subscriptions, under which no additional fees were to be charged, while intentionally withholding from class members that they were actively planning implementing substantial changes to both lister and renter business models in the near future.

According to the 36-page complaint, even though the defendants promoted their premium services—which provided preferential placement and visibility for subscribers’ rental listings—at a specific price, the company hid from individuals that already signed onto this model that it planned to implement a sweeping change the plaintiff claims would:

• Impose fees on travelers and renters that would “effectively increase the effective price and diminish the value of” Expedia’s services for which subscribers had already paid; and
• Modify its listing algorithm used on websites run by HomeAway.com to favor property owners and managers who elect to allow online booking by travelers and penalize those who do not permit online booking, even though current subscribers had already paid for preferential placement

Relatedly, the suit claims HomeAway.com did not disclose to users that it would begin charging fees to travelers who rent its listings, a move class members claim would reduce the demand for their listed properties and cause a loss of revenue from bookings.

The proposed class defined in the complaint includes:

• “All vacation home owners and managers who purchased a subscription to one or more of HomeAway’s web sites between February 9, 2015 and February 8, 2016. Expressly excluded from the Class are HomeAway and its subsidiaries, affiliates, officers, directors and employees.”

Additionally, the lawsuit covers two proposed subclasses, a “Premium Subscription” subclass:

• “All vacation home owners and managers who purchased a premium-level subscription (designated as “Platinum,” “Gold,” “Silver,” or “Bronze”) to one or more of HomeAway’s web sites between February 9, 2015 and February 8, 2016. Expressly excluded from the Premium Subscription Sub-Class are HomeAway and its subsidiaries, affiliates, officers, directors and employees.”

And an Oregon-specific subclass:

• “All Oregon residents who purchased a subscription to one or more of HomeAway’s web sites between February 9, 2015 and February 8, 2016. Expressly excluded from the California Sub-Class are HomeAway and its subsidiaries, affiliates, officers, directors and employees.”