Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Hotel booking websites, hotel chain to loosen restrictions on discounting to resolve U.K. competition concerns, (Aug 12, 2013)

By Jeffrey May, J.D.

To resolve competition concerns raised by the United Kingdom Office of Fair Trading (OFT), online hotel booking websites Booking.com B.V. and Expedia Inc., as well as hotel chain InterContinental Hotels Group plc (IHG), have agreed to alter their distribution agreements to the extent that they restrict the ability of the websites to discount room-only hotel bookings. The OFT announced on August 9 that it is seeking feedback on the concessions to determine whether to make them binding on the companies. For consideration, the comments must be received by September 13, 2013.

If approved by the OFT, the proposed commitments would resolve a formal investigation into suspected breaches of competition law in the hotel online booking sector, which was launched in September 2010. The OFT issued a Statement of Objections in July 2012, naming IHG, as well as Booking.com and Expedia, two of the largest online travel agents (OTAs) in the United Kingdom. According to the Statement of Objections, each OTA entered into a separate agreement with IHG that restricted each OTA's ability to discount the rate at which room only hotel accommodation bookings were offered to consumers. Booking.com's ultimate parent company is Priceline.com Incorporated.

The commitments would relax existing restrictions so that the OTAs can provide discounts on the rate at which room only hotel accommodation bookings are offered. Under the proposed commitments, the websites would be free to use their commission revenue or margin to fund discounts to consumers who meet certain criteria.

The OFT expects the investigation to impact agreements throughout the online travel industry. It was noted, however, that the investigation was limited to these three parties in an effort to achieve a swift and effective outcome, according to the OFT.

IHG response. Hotel company IHG, whose portfolio includes the InterContinental and Holiday Inn brands among others, issued a statement acknowledging the OFT public consultation. The company noted that the commitments are designed to bring an end to this investigation without a finding of infringement or the imposition of any fine.

Companies: Booking.com B.V.; Expedia Inc.; InterContinental Hotels Group plc; Priceline.com Inc.

News: Antitrust