Expedia and Booking.com face OFT investigation into hotel room discounts

02/08/2012

The operator of Holiday Inn is under investigation for signing a potentially unlawful deal to limit discounts on rooms. The operator of Holiday Inn and Crowne Plaza hotels and two of the UK’s biggest online travel agents - Expedia and Booking.com - are facing an investigation by the Office of Fair Trading today for signing a potentially unlawful deal to limit discounts on rooms.

Booking.com and Expedia entered into separate agreements with Intercontinental Hotels Group (IHG) which are provisionally believed to have infringed competition law, the OFT said.

The arrangement between Booking.com and IHG is still in place, while Expedia allegedly violated rules between October 2007 and September 2010, the OFT added.

The investigation focused on IHG, Booking.com and Expedia but the competition regulator warned the alleged practices are potentially widespread in the industry.

The OFT said all parties will now have a full opportunity to respond to its findings before the watchdog decides whether competition law has in fact been infringed.

In response, Expedia and Booking.com have joined InterContinental Hotels Group in strongly refuting that claims that they colluded to restrict discounts on rooms.

Expedia is co-operating with the OFT under "conditional immunity" and will not face fines should it be found to have infringed the law, provided it continues to work with the regulator.

Amsterdam-based Booking.com denied the allegations and would contest them “vigorously”.

Expedia said the OFT investigation had not established “that any laws have in fact been broken”.

The investigation was launched in September 2010 following a complaint submitted by a small online travel agent, alleging that it was being prevented by various hotel chains from offering discounted sale prices for room only hotel accommodation, the OFT said.

Clive Maxwell, OFT chief executive, said: “We want people to benefit fully from being able to shop around online and get a better deal from discounters that are prepared to share their commission with customers.”

The Competition Act 1998 prohibits, among other matters, agreements and practices that prevent, restrict or distort competition in the UK.

IHG has more than 661,000 rooms in over 4,500 hotels in nearly 100 countries, operating nine hotel brands - InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites, Candlewood Suites, Even Hotels and Hualuxe Hotels and Resorts.

Booking.com claims to be the number one online hotel reservation service in the world, offering more than 210,000 hotels, and is available in 41 languages.

Expedia offers a directory of 80,000 accommodation properties worldwide and four million rooms, as well as fares on more than 450 airlines.

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