November 26, 2012
On Monday, the Department of Transportation entered a consent order against Travelzoo (Nasdaq: TZOO ) , fining the Internet travel deals website $50,000 for "failing to properly disclose code-sharing arrangements."
Specifically, DOT said that as a ticket agent arranging air transportation, Travelzoo is required to inform customers of the name of the carrier on which the passenger will be flying "on the first display of the website following a search of a requested itinerary in a format that is easily visible to a viewer." When code-sharing could take place on a flight, DOT says Travelzoo is required to "prominently disclose" this fact and "identify all potential" code-sharing airlines that a customer might wind up being put aboard. Failure to do so constitutes an unfair and deceptive trade practice under federal law.
According to the DOT, there was "a period of time during 2012" when Travelzoo did not properly disclose the potential for code-sharing on flights it sold through its www.fly.com website, thus violating the law. Travelzoo says it didn't believe that Fly.com was a "ticket agent" under the meaning of the law and is still not certain that it is. Nonetheless, the company has agreed to revise Fly.com's website to disclose code-sharing arrangements and to pay a $50,000 fine.