In the last few days, Italian Antitrust Authority decided to accept the commitments undertaken by Booking.com (a company of Priceline’s group) during the investigation proceeding launched in May 21st, 2014.

 

The investigation was initiated following the complaints lodged by Federalberghi, Confindustria Alberghi and Guardia di Finanza in relation with the alleged infringement, by Booking and Expedia, of the Article 101, TFEU.

The specific reference was made to the following two clauses, as included in contracts between the aforementioned companies and the hotel facilities:

1) Most Favoured Nation: this is a clause whereby the hotel facilities must ensure to the online travel agencies (OTA) the best economic treatment at all;

2) Parity Rate: this is a clause whereby the hotel facilities must ensure to OTA, as Booking or Expedia as well, that the reservation price, as indicated n the web platforms, is the lower of all the web.

 

The infringement of competition was evident considering the limitation imposed to hotels, which were subject to the prohibition to offer its customers any kind of promotion as well as to indicate a lower price on its web site or on other communication devices. This price, as evident, was distorted because the amount indicated on Booking or Expedia as well is composed also of a share, equal to 30% , that is retained by way of commission for reservation service.

 

Moreover, it must be considered that the Most Favoured Nation clause binds the hotel facilities to not drive the prices down, by this way restricting competition; the one of Parity Rate means that if the hotel facility can not reduce the price on a web platform different from Booking or Expedia, because on web a lower price should not be figured out.

 

During the investigation, the Italian Antitrust Authority, who acted together with the French and the Swedish ones, considered that the first one of the aforementioned clauses is potentially able to restrict competition on the commissions requested to the hotel facilities, with strong consequences on the related prices and, at least, on the customers.

Whereas Expedia is still under investigation, the Antitrust decided to accept the commitment undertook by Booking and on the basis of which the hotel facilities may decide both the number and the kind of room that will be sold on several web platforms, including the own web-site, without any sort of preferential economic treatment in favour of Booking (clause of Most Favoured Nation). At the same time, hotel facilities may offer lower discounts only trough offline devices, i.e. in the case they will be contacted by phone, email or personally by the customers. As a consequence of this, Booking has been able to preserve the most advantageous clause, the one of Parity Rate. By this way, the hotel facilities are still obliged to offer lower prices than the ones indicated on Booking.

 

Such a consideration prompted reactions over the concerned field, as revealed by Federalberghi General Director: the opportunity to offer lower discounts only through offline devices represents a step back to communication means outdated by both web and mobile technology.

 

A topic that, in the view of consumer protection, deserves particular attention is about the case in which the customers discover a difference between the price practised on web and concerned a certain hotel facility: the latter shall be reimburse the customers of the price surplus as well as it should be declassified on the web ranking.

 

Dott.ssa Paola Perinu