OFT to investigate Booking.com for alleged price-fixing

Booking.com, with their typical corporate bullishness, probably view the FairerFees campaign as little more than a local irritation. What they fail to see though is that the campaign captures the mood of many accommodation providers who are fed up with the way they are being taken for granted by the corporate giants. But now it seems The Office of Fair Trading is also taking notice of their sharp practices.

The OFT is investigating a price fixing practice called “resale price maintenance’. In English this means agreeing not to sell rooms at lower prices than advertised on the Booking.com site. If you list rooms on Booking.com you’re more likely to know this as “rate parity”. The general consequence is inflated prices, as if they aren’t already inflated with 15% commission charges to cope with. Rate parity is all very well for the booking agent but not good for competition. Indeed, if proven, this activity could be seen as controlling the final retail price and as such is anti-competitive.

Of course Booking.com are putting a brave face on the allegation. Chris Haslem of the Sunday Times contacted Rutger Prakke of Booking.com for his article, (Sunday 5th Sep) and was informed, “We are not aware of infringing any law and we have not been advised by any regulatory authority that rate parity constitutes anticompetitive behaviour”. Microsoft took a similar stance on their European anticompetitive charge… And lost! Good luck Booking.com, we’re watching with interest.

Published on September 6th, 2010 Uncategorized  |  4 Comments

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4 Responses to “OFT to investigate Booking.com for alleged price-fixing”

  1. anonymous says:

    Sorry, I only just saw this so I’m slow off the mark.

    It is true that Skoosh and others don’t have contracts direct with hotels. That’s the nature of wholesale business. Hotels couldn’t possibly manage all the thousands of individual retailers selling their rooms. That’s why their distribute their rooms to wholesalers.

    In a way, it is like someone selling your house without your knowing. Presumably that’s a good thing. You’ve put your property on the market with an estate agent and they’ve subcontracted the work. One of their subcontractors manages to find a buyer for you. It seems strange for you as the house seller to call up the sub-contractor and demand that they stop marketing your house when that’s exactly what you were hoping for in the first place.

  2. anonymous says:

    There is somethings that are missing here.

    The 1st is, that there is it’s hotel’s that update the Rates to the diferent contracted channels.

    And 2nd many of this new companies as Skoosh easyclick Travel etc etc, do not have contracts with the hotels, they neither know that this channels exist.

    Isn’t this Ilegal??? One thing is having a contract w/ an hotel and try your best to have the best Rate of the Market another one is a company that makes an agreement with a Tour Operator and sell an Hotel offline Rate that usually is Included in a Package at an online Rate, as Booking.com, Hotels.com.

    So I beleive this is not a fair competition there is different contracts with different Rates one are online and another offline But, a channel that doesn’t have a contract with an Hotel is showing online rates that should be offline, It’s totally wrong. This new channels 1st are reducing RevPar from the hotels, 2nd hotels are starting to loose the control on their rates as the contract rules are not being followed and finally the OTA’s are loosing volume in terms of Reservations.

    I beleive that 1st Hotels do not want to follow this new system as some new distributors are making as if this continues you will start to see the Big OTA’s working in the same system, and for sure they will have more power as they already have, and hotel’s will loose the control of their Rates.

    Just in conclusion, where is the fair competition that this new channels are asking, pulling rates from hotels that they do not have contracts is fair? It’s not fair and it’s ilegal, it’s like someone selling your house without you know.

  3. andyflack says:

    The source of this story is a report in The Sunday Times, 5th September 2010, by Chris Haslem.

  4. anonymous says:

    Do you have something from OFT to confirm this? I can’t find anything about this on OFT website (after admittedly very brief search).

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