The national competition authorities of Sweden, Italy and France, in coordination with the European Commission, are the latest regulators to have accepted commitments offered by Booking.com, Europe's largest online booking platform.
Booking.com has agreed to amend its price parity clause and remove any clause imposing parity obligations in terms of the availability of rooms or commercial conditions both for online and offline channels.
This means that hotels now have the freedom to apply lower prices and/or better commercial conditions on platforms that compete with Booking.com and also allocate them a larger quota of rooms. They may also offer lower rates than those on Booking.com via their own offline sales channels.
The commitments will remain in place for 5 years and the aims are:
- they should provide an impetus to competition between Booking.com and competing online travel agents, allowing the commissions levied on the hotels to fall;
- they also give hotels some countervailing power by considerably improving their commercial and pricing freedom;
- they maintain at the same time the online travel agents' economic model which provides consumers with powerful research and comparison services.
After all of the investigations and interventions in this sector, please let me know how you get on with your holiday hotel bookings this year!
If you would like to discuss any of these issues, please do not hesitate to contact John Cassels at email@example.com.