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The European Union warned Airbnb on Monday that its business practices must comply with the EU’s regulations, after a review of the home-sharing company’s terms and conditions reportedly found several violations.

Specifically, Airbnb is under fire for the way it presents its rental prices, and some of the San Francisco-based startup’s other terms were found to be in violation of the EU’s unfair commercial practices directive, the unfair contract terms directive and the regulation on jurisdiction in civil and commercial matters, an EU executive told Reuters.

The EU wants Airbnb to clarify on its site whether a rental is offered by a private individual or professional company, as well as making its pricing more transparent and making its terms of service fairer and easier to understand for its European customers. For example, Airbnb should not prevent customers “from their basic legal rights to sue a host” if they suffer personal harm or other damages, the EU said, according to Bloomberg.

Airbnb has until the end of August to present proposed changes to the EU Commission’s criticisms, or it could face major fines for not complying with the regulations.

“Popularity cannot be an excuse for not complying with EU consumer rules,” EU Justice Commissioner Vera Jourova said in a statement. “Consumers must easily understand… how much they are expected to pay for the services and have fair rules for example on cancellation of the accommodation by the owner.”

Airbnb contended that for the most part, its pricing model is transparent.

“We take this issue seriously and are committed to being as transparent as possible for our community,” Airbnb said in a statement to Bloomberg. “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.”

Featured image by Carl Court/Getty Images.

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