UK’s Office of Fair Trading investigates the online hotel booking market

Last 31 July 2012, the United Kingdom’s Office of Fair Trading (“OFT”) formally issued a Statement of Objection (“SO”) to online travel agents Booking.com and Expedia as well as hotel group InterContinental Hotel Group and Hotel Inter-Continental London alleging that they have infringed U.K. competition law in relation to the online supply of room-only hotel accommodation by online travel agents. However, the OFT stated that the investigation is likely to have wider implications as the alleged practices are potentially widespread in the industry. The OFT has assessed the alleged practices from January 2007 onwards.

Booking.com and Expedia each entered into separate arrangements with IHG which restricted the online travel agent’s ability to discount the price of room-only hotel accommodation. In essence, such anticompetitive agreements between hotels and online travel agents could limit price competition between online travel agents and increase barriers to entry and expansion for online travel agents that may seek to gain market share by offering discounts to consumers.

The formal investigation was initiated 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. [Gabriele Accardo]

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