Skift Take

The European single market is a sacred thing and anyone caught trying to divide it up like the old days is liable to be on the receiving end of a punishment. In this case, Meliá's cooperation with the investigation has helped cut its fine.

Spanish hospitality company Meliá Hotels International has been fined $7.2 million (€6.7 million) by the European Union for breaching antitrust laws.

The punishment, handed out by the European Commission, the EU’s executive arm, relates to restrictive clauses in Meliá’s agreements with tour operators, covering the years 2014 and 2015.

Companies operating within the European single market are not supposed to discriminate based on things like country of residence, which is what appears to have been going on in this case.

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The investigation found that the standard terms and conditions in the contracts between Meliá and tour operators contained a clause validating them for reservations where consumers were resident in specified countries.

The end result was that consumers were not able to see the full hotel availability or book rooms at the best prices with tour operators in other countries.

When the EU’s Competition Commissioner Margrethe Vestager opened up the case in 2017 a number of tour operators were investigated as well, including TUI and Thomas Cook, but the Commission decided not to take things further.

“This time of the year, many people are booking their summer vacation and are looking for the best deals on offer. Meliá prevented tour operators from freely offering hotel accommodation everywhere in Europe,” Vestager said in a statement.

“As a result, consumers had access to different offers and different prices based on their nationality. This is illegal under antitrust rules. Consumers should be able to make full use of the Single Market and to shop around for the best deal.”

Meliá did, however, get some credit for offering cooperation “beyond its legal obligation to do so” and therefore secured itself a 30 percent reduction.

In a statement, Meliá said it understood the agreements in question “had no adverse effects on competition in the market, and signed them with that intention,” but that in the interest of its customers and partners “decided not to delay the investigation.”

“[Meliá] is fully committed to the rules on competition and the European single market, and as a result of this investigation implemented internal compliance procedures to ensure that all of its contracts are fully compatible with those rules,” the company said.

“As a responsible company committed to transparency, compliance and good governance, we are confident that this penalty will further reinforce our commitment and that of the entire industry to compliance with regulations within the European space.”

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Tags: antitrust, eu, european commission, european union, spain, tour operators

Photo credit: The Melia Granada hotel. The company has been fined by the EU. Melia Granada