Airbnb has been told to make the way it presents prices clearer, to avoid falling foul of EU law.

The European Commission says Airbnb must make it clear at the outset how much users will pay - including service and cleaning charges.

It should also clarify whether a property is being let by a private or professional host as, at present, Airbnb does not meet the standards required to comply with EU law.

It has demanded Airbnb make a number of changes by the end of August to avoid enforcement action.

The move comes just weeks after the competition watchdog announced that hotel booking sites had been hit with enforcement action amid concerns that some may be hiding charges.

For 21 tips for temporarily renting a home or room to holidaymakers see our Rent Out Your Home on Airbnb guide.

What has Airbnb been told to do?

The European Commission has said that Airbnb should:

  • Modify the way it presents information on pricing from the initial search on their website. It has been told to ensure that, whenever properties are offered, customers are provided with the total price inclusive of all the applicable mandatory charges and fees, such as service and cleaning charges, or, when it is not possible to calculate the final price in advance, clearly inform the consumer that additional fees might apply;

  • Identify if the offer is made by a private host or a professional. The Commission says the consumer protection rules differ depending on this.

  • Bring its terms of service into conformity with European law. As an example of this, the Commission says that the company should not mislead consumers by going to a court in a country different from the one in their country of residence.

  • Provide an easily accessible link to the Online Dispute Resolution (ODR) platform on its website. This is a service provided by the European Commission to help online businesses resolve disputes with online customers without going to court.

The Commission says that if Airbnb doesn't make these changes to the required standard by the end of next month, it could face an enforcement action.

What does the European Commission say?

Commissioner Vera Jourová, commissioner for justice, consumers and gender equality said: "More and more consumers book their holiday accommodation online and this sector has brought many new opportunities to holidaymakers.

"But popularity cannot be an excuse for not complying with EU consumer rules. 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. I expect Airbnb to follow up swiftly with the right solutions.”

What does Airbnb say?

An Airbnb spokesperson said: “We take this issue seriously and are committed to being as transparent as possible for our community.

"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.”