Digital Booking Sites

Germany Probes Expedia and Booking.com on Hotel Rate Contracts

Dec 20, 2013 10:40 am

Skift Take

Hotels and online travel agencies are feeling the heat from competition authorities and lawsuits in Europe and the U.S., challenging the way they’ve done business for years. The changes imposed so far have been minimal, but more is to come.

— Samantha Shankman

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Expedia Inc. and Priceline.com Inc.’s Booking.com face a German antitrust probe into agreements with hotels that prevent online rivals from undercutting their prices.

Best-price clauses between online reservation platforms and hotels hinder other online services, the German cartel office said in an e-mailed statement today. The regulator banned another company, Hotel Reservation Service from using such clauses with German hotels, giving them until March 1 to delete them from existing contracts.

“Only at first view do most favored customer clauses used by online booking portals seem to benefit consumers,” said Andreas Mundt, the head of Germany’s cartel office, Bundeskartellamt. “Ultimately the clauses prevent the offer of lower hotel prices elsewhere.”

While the German probe accelerates, the companies made new concessions to settle a U.K. investigation with some parallels. The U.K.’s Office of Fair Trading said Intercontinental Hotels Group Plc, Expedia Inc. and Booking.com amended concessions they made in August to allay regulators’ concerns and end a probe into online hotel bookings.

The OFT is seeking industry and consumer reaction to the changes, which would apply for three years to bookings made by all European customers for U.K. hotel rooms and clarify that hotels can make the same discounts to customers as online travel agencies.

U.K. and German regulators last month dropped investigations into Amazon.com Inc.’s sales restrictions after it ended a ban on retailers using its site charging less for products they sold on other platforms.

Mundt said earlier this month that he wanted to send “a strong signal” on price guarantees and that different pricing for online and offline goods was “widespread” and that regulators were ready to examine the issues.

Editor: Anthony Aarons.

To contact the reporter on this story: Gaspard Sebag in Brussels at gsebag@bloomberg.net. To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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