French hotels may or may not have a legitimate gripe about the market power of Expedia and Booking.com. But, the timing of the hotels' complaint makes it seem as though they have been in a time capsule, as if they just discovered the state of market dynamics that have been in place for a decade.
French hotels launched an attack on three of the world’s biggest online booking firms, saying they are unfairly twisting their arm on prices by banning them from offering reductions or taking bookings direct.
France’s biggest hotel employer’s union, UMIH, argues that Booking.com – the largest online hotel reservation website in the world – Expedia and HRS, are breaking French and European competition rules by forcing hotels to give them their lowest rates, and then barring them from offering discounted rates elsewhere, including on the hotels’ own websites.
It took its complaint to France’s competition authority, adding that the commission imposed by the companies is becoming extortionate.
“The online hotel booking platforms have become a crucial channel of distribution for French hotels, notably the smaller ones,” said UMIH. However, it added, “the advantages offered by these platforms have gradually been cancelled out by the harmful effects of commercial practices that violate European and French competition laws.”
The union’s president Roland Héguy complained of “a radical hardening of contractual clauses imposed on hoteliers who, given the structure of the market, are no in no position to refuse them.”
When hotels sell directly to consumers they are free to set out their own retail prices. But those hotels that sign contracts with these online sites with “non-negotiable clauses” are obliged to offer the same prices and room quality. This amounts to “price fixing” and is thus anti-competitive, the union argues.
“The hotelier is no longer master of his offer and management,” said Mr Héguy.
The French attack comes months after the Swiss competition commission launched a probe against the three booking agents for infringement of so-called “rate parity practices”.
Last year, the Office of Fair Trading in Britain also accused Expedia, Booking.com and InterContinental Hotels Group of infringing competition law by signing deals that limit the discounts offered to consumers on rooms.
The websites have not responded to the French accusations, but have said they will cooperate with any investigation regarding the other countries.
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