On Friday, Judge Buchwald dismissed a proposed class action against online staffing agency Fiverr, an online platform connecting freelance service providers to customers. Three individuals alleged that Fiverr’s presentation of service fees is a deceptive practice under New York and California law. The plaintiffs claimed to have searched for and selected the services of a specific freelancer based on the pricing shown on the freelancer’s Fiverr page, only to be surprised by the addition of Fiverr’s service fee on the final checkout page.
The plaintiffs characterized Fiverr’s pricing as “drip pricing”, which they defined as “displaying one price for a good or service before adding one or more mandatory fees shortly before the consumer completes the transaction.” In recent years, the Federal Trade Commission has cracked down on “drip pricing”, also called “bait and switch pricing”, in the event ticket and rental housing markets.
In rejecting the plaintiffs’ claims, Judge Buchwald found that the reasonable consumer would not be deceived by Fiverr including a service fee late in the process because the fee is expressly disclosed in the Payment Terms and is listed as a separate item before the buyer must select “Confirm & Pay” to complete a purchase.
Judge Buchwald explained:
The relevant question here, therefore, is whether a significant portion of reasonable consumers, viewing Fiverr’s purchase process in context, would likely understand Fiverr to represent that the first amount displayed was the complete amount payable. Plaintiffs allege that Fiverr engages in “drip pricing” by displaying one price when a consumer begins searching for a service and adding a mandatory service fee after the consumer has invested time selecting a freelancer and service. However, plaintiffs do not allege that Fiverr affirmatively describes the first amount displayed as the “total,” “final,” or “all-in” price. Nor, when the purchase process is viewed as a whole, would a reasonable consumer understand it that way.
Judge Buchwald also addressed the plaintiffs’ claim that “consumers ‘feel committed’ to a purchase after selecting a freelancer and may proceed despite an increased total because abandoning the transaction would produce dissatisfaction or require additional effort.” As Judge Buchwald explained, that is a reason a consumer may accept or reject a purchase, not the result of a deceptive act by Fiverr.