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Competition Law

Analysis - debate - current awareness

25 JUL 2014

It's summer… 

John Cassels

Partner

It's summer… 
And time for an update on the various antitrust investigations into price fixing in the hotel online booking sector.

In the UK, the antitrust investigation was sparked by complaints from at least one online agent (Skoosh.com). It complained that some hotel bookers and hotel groups were conspiring to raise prices to consumers and that they sought to enforce the conspiracy via hotel groups threatening not to sell their rooms via the Skoosh website.
Following a three year investigation, Booking.com, Expedia and Intercontinental were found by the UK authorities to have entered into unlawful agreements whereby the online agents would not offer discounts on sales of rooms supplied by Intercontinental. On 31 January this year, the UK authorities accepted commitments from the parties to terminate the agreements and to allow online agents to offer discounts.

The investigations in the UK have been followed by similar investigations in other EU states:

- in Germany, the Federal Cartel Office (FCO) banned a 'most favoured customer' provision which meant that hotels had to agree to offer their lowest rate via the online agent Robert Ragge. The FCO took the view that the clause prevented hotels from offering better prices or conditions to consumers who were willing to shop around;
in Italy, the competition authority has recently initiated proceedings against Booking.com and Expedia;

- in France, the hotel employee union has complained that Booking.com and Expedia are breaching the antitrust rules by barring hotels from offering lower rates via other agents; and

- in Switzerland, the Competition Commission has opened an investigation into 'most favoured customer' provisions used by online agents.

All of which suggests that empowered consumers shopping around online for the best holiday deal may not, ultimately, have had that much effective choice.

If you are interested in these issues, please do not hesitate to contact John Cassels at john.cassels@fieldfisher.com.

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