OFT starts consultation on Expedia Booking.com competition commitments

By Travolution
By Travolution
December 20, 2013 12:34 PM GMT

The Office of Fair Trading today opened consultation on revised commitments put forward by Booking.com, Expedia and InterContinental Hotels Group.

The proposals are designed to address competition concerns covering the online offering of room-only hotel bookings by online travel agents.

The OFT said it “is minded” to accept the commitments and is inviting interested third parties to comment.

As a result of the consultation and further developments, the OFT said it considers the original commitments address its competition concerns, subject to the following amendments which the parties have offered:

•    Hotel discounting: the commitments clarify that hotels will be allowed to offer discounts in an equivalent manner to OTAs
•    Geographic scope: the commitments will apply to bookings made by European Economic Area residents for rooms in UK hotels, rather than to bookings made by UK residents for rooms in EU hotels
•    Duration: the commitments will apply for a period of two years, rather than three years

Ann Pope, senior director in the OFT's services, infrastructure and public markets group, said today:

“The OFT considers that these revised commitments should inject a meaningful degree of price competition into the online offering of hotel bookings.

“We would now like to hear the views of interested third parties, in particular on the amendments being proposed.”

The OFT issued a statement of objections last summer alleging that Booking.com and Expedia each entered into separate agreements with IHG, which restricted each OTA's ability to discount the rates at which room-only hotel accommodation bookings are offered to consumers.

The OFT announced in August that it was consulting on draft commitments proposed by the three businesses as a means of addressing the its competition concerns. It invited comments from third parties such as other businesses and consumers.

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