Understandably, Expedia and Booking are both trying to spin this in their favor as much as possible but it seems like a big win for the UK's competition regulator. We'll have to keep an eye on how much it really changes things and whether other countries follow up.
Online travel brands belonging to Expedia Group and Booking Holdings have agreed to make changes to their hotel search results following an investigation by the UK’s competition regulator.
The Competition and Markets Authority’s work centered around concerns over issues such as pressure selling, misleading discounts claims, the impact of commission on search results, and hidden charges.
Expedia, Booking.com, Agoda, Hotels.com, Ebookers and Trivago were all part of the investigation. Expedia Group owns Expedia, Hotels.com and Trivago. Booking Holdings owns Booking.com and Agoda.
The CMA started enforcement action last year and although it has legal powers the companies involved have “voluntarily agreed” to make the changes.
Crucially for Expedia and Booking, the CMA has not made a finding on whether their sites’ practices were illegal. That is up to a court to decide. The fact that they have agreed to make changes is not an admission that they broke the law.
The sites have now said they will pull back on pressure selling, which might include giving a “false impression of the availability or popularity of a hotel.” Phrases such as “10 people are looking at this hotel” are widespread in the industry.
The companies have said they will also only promote deals that are available; and display all applicable charges, such as taxes, in the headline price.
“The CMA has taken enforcement action to bring to an end misleading sales tactics, hidden charges and other practices in the online hotel booking market. These have been wholly unacceptable,” said CMA Chairman, Andrew Tyrie.
“Six websites have already given firm undertakings not to engage in these practices. They are some of the largest hotel booking sites. The CMA will now do whatever it can to ensure that the rest of the sector meets the same standards.”
Not every online travel agency involved in the action engaged in all of the practices mentioned above but they have all agreed to make the required changes.
All sites must make the changes by September 1, including those not directly part of the investigation.
One of the organizations pushing for change in the online travel sector was the Bed and Breakfast Association, which made five formal complaints against online travel agents back in 2017. Its chairman, David Weston, said he was “delighted” with today’s news.
“These online giants have grown to dominate our industry in recent years, partly (as the CMA’s action shows) by misleading and unfair practices at the expense of consumers and small businesses like B&Bs,” he said.
Expedia and Booking Responses
Both Expedia and Booking are saying publicly that they are delighted that enforcement action has ended amicably. It would have looked pretty bad for both if the CMA had decided initiate legal proceedings because they had declined to co-operate.
A spokesperson for Booking holdings said the company was “pleased” the CMA had closed its investigation “without finding admission of infringement” from any of Booking.com, Agoda or Kayak.
“In concluding our discussions with the CMA we have agreed to test and implement new commitments, like pricing inclusive of all fees, to ensure we meet all standards for consumer transparency in the UK,” the spokesperson said.
Meanwhile, Expedia said in a statement that it was “surprised and disappointed in the CMA’s description of our partnership with them” in the press announcement which it believed “mischaracterizes the collaborative and good faith approach taken in establishing industry standards” and that it continued to believe its “practices did not breach any consumer laws.”
The company said: “We are however pleased the CMA has been clear that it views this new standard as one applicable to all participants in the industry, whether online travel agents, search engines and metasearch sites or the direct sites of accommodation providers.”
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Photo Credit: A Booking.com image. The company along with several other online travel agencies was investigated by the UK's Competition and Markets Authority. Booking.com