OFT opens hotel booking investigation to public
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The Office of Fair Trading (OFT) has opened its investigation into the room-only online booking market to a public consultation.
The competition authority has asked interested parties to comment on competition within hotel bookings on the internet as part of its on-going investigation into agreements between Booking.com, Expedia and InterContinental Hotels Group (IHG).
In July 2012, the two OTAs were accused of entering separate contracts with IHG that supposedly breached competition law by restricting the discounts that other OTAs could offer.
Booking.com and Expedia have now agreed to relax these restrictions, which mean other OTAs will be allowed to use commission revenue or margin to offer discounted rates to certain clients.
Both OTAs have denied breaking competition laws since the OFT first launched the investigation in September 2010.
While the case will focus on a small number of companies for what the OFT hopes will be a “swift and effective outcome”, it warned that the study is likely to impact further as the practice is “potentially widespread” across distribution arrangements in the industry.
“The OFT is consulting on whether these commitments offer an immediate and effective means of injecting some meaningful price competition into the online offering of room only hotel accommodation bookings where, in our provisional view, none may exist. Under the proposed commitments, OTAs would be able to offer discounts off hotel room bookings to qualifying consumers,” its statement read. “The OFT would now like to hear the views of all interested parties before it makes its decision on whether to accept the commitments.”
In a press statement IHG said it had worked closely with the OFT to agree on the commitments.
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