LITIGATION TRENDS 2025 | 29 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C David Singh Partner Silicon Valley david.singh@weil.com Class Actions Targeting Hidden Fees Hidden fees have become a major concern for consumers, leading to a rise in class action lawsuits and regulatory enforcement. Hidden fees – often referred to as “junk fees” or “drip pricing” – are fees that are not disclosed upfront to consumers, but are added at the final stages of transactions. These fees can appear in various forms, including service charges, administrative fees, or processing costs, often making the total price of a product or service significantly higher than what was initially advertised. The FTC has made clear that eliminating hidden fees is a regulatory priority, signaling that businesses engaging in these practices will face increased scrutiny and potential enforcement actions. Private plaintiffs may also utilize new laws against hidden fees to bring their class actions in the coming year. Effective May 12, 2025, the FTC’s Rule on Unfair or Deceptive Fees will prohibit businesses that sell live-event tickets and short-term lodging from: (1) failing to clearly and conspicuously disclose the maximum total of all fees or charges a consumer must pay for any good or service (the “total price”); (2) displaying the total price less prominently than other pricing information; (3) failing to clearly and conspicuously disclose all fees excluded from the total price; and (4) misrepresenting the fees associated with the purchase. California’s Senate Bill 478 (“SB 478”), Class Actions effective July 1, 2024, also amended the California Legal Remedies Act to prohibit advertising prices that do not include all mandatory fees or charges. Besides these new additions, traditional state consumer protection laws remain a viable avenue for consumers to challenge hidden fees. To mitigate future risk, businesses should consider adopting proactive strategies to ensure they are transparently communicating their pricing to customers. Business should clearly disclose all fees upfront, near the advertised price, and prominently display the final price inclusive of those fees. Third-party audits can also help businesses identify areas for change, such as hidden fees that appear late in the transaction, vague terms like “processing fee” without explanation, or inconsistent fee disclosures. By adopting transparent pricing structures and regularly reviewing their practices, businesses can reduce legal risk and maintain consumer trust. Ad Tech Privacy Class Actions: A Growing Legal Risk for Businesses As companies collect vast amounts of user data for personalized advertising, they face growing litigation risks over privacy violations, improper data sharing, and noncompliance with consumer protection laws. Ad tech, or advertising technology, refers to the digital tools used by nearly all major website operators to track and collect user information and activity, and deliver targeted ads to consumers across websites, apps, and social media. There has been a surge in privacy concerns based on businesses that leverage consumer data through the use of tracking technologies such as cookies, pixels, and session replay tools, triggering a wave of class action lawsuits. In 2024, plaintiffs filed more than two hundred class action complaints in jurisdictions across the country concerning the use of tracking technologies such as the Meta Pixel or Google Analytics. Plaintiffs often allege that companies implementing CROSS-PRACTICE FOCUS 28 | Weil, Gotshal & Manges LLP
RkJQdWJsaXNoZXIy MTI5NDgyMg==