Italian competition authority investigates online hotel bookings

By Gabriele Accardo and Aurelia Magdalena Goerner

On 7 May 2014, the Italian Competition Authority (“Agcm”) initiated proceedings (decision only available in Italian) against Booking.com and Expedia in the online hotel reservations space. This is yet another case in the wake of similar investigations undertaken by other national competition authorities in Europe (see Newsletter 1/2014, p.15, Newsletter 5-6/2013, p.9 and 11, Newsletter No. 4-5/2012, p. 15, for additional background).

The Agcm is assessing, among other things, the compatibility with the antitrust rules on anticompetitive agreements and abuse of dominance by the use of the so-called most favored nation clauses (“MFNs”) included in the terms and conditions of Booking.com and Expedia.  MFN clauses would require hotels that want to appear on the respective platforms of Booking.com and Expedia to not offer their services at prices lower than or terms better than those made available to other booking agencies, and in general via all booking channels available (both brick-and-mortar and online) including the websites of the hotels themselves.

The Agcm is also investigating the application of the so-called Best Price Guarantee, which assures consumers about the convenience of the offer compared with similar ones offered, e.g., online. On the other hand, the clause requires hotels to apply the lower rate that may be found online, and eventually to provide a refund of the difference paid by the consumer, in case the reservation price was not the lower available.

According to the Agcm, these terms may result in substantial alignment of prices by reducing the incentives for hotel operators to compete, taking into account the fact that the failure to observe them would negatively affect the visibility of the hotels’ own 

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