Better conditions for competition between online travel agencies following investigation

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– The conditions for competition between online travel agencies have improved. This is shown by a recent monitoring exercise of the decisions on the contractual terms and conditions of online travel agencies made by several competition authorities within the EU a few years ago. However, the monitoring shows that many hotels are not aware of these positive changes. This is something we want to change, says Karin Lunning, Acting Director General of the Swedish Competition Authority.

Karin Lunning presents the results of the monitoring exercise conducted by the Swedish Competition Authority and nine other competition authorities together with the European Commission.

Several national competition authorities within the EU simultaneously investigated the contractual terms and conditions of online travel agencies. What was the effect?

– Different countries chose different solutions to deal with the competition problems with the online booking of hotel rooms. The monitoring show that it is now more common than before that hotels post different prices or product offerings at different online travel agencies. The conditions for competition between the online travel agencies have thus improved following the changes in the contractual terms and conditions. This benefits consumers, who can get better search and comparison services and more attractive offers when booking hotel rooms.

The monitoring also shows that many hotels are not aware of the contractual changes and what they mean for the hotels’ opportunities to offer services through different channels. What are your thoughts on that?

– It is important that hotels are aware that they have the right to post different prices at different online travel agencies. We will therefore make efforts to increase knowledge about these new possibilities. For instance, we will be sending letters directly to hotels in Sweden, informing them about these changes.

Why did the Swedish Competition Authority decide a few years ago to investigate the contractual terms and conditions of online travel agencies?

– The Swedish Competition Authority got a tip-off that online travel agencies were applying conditions prohibiting hotels that wanted to sell services through their website from offering lower prices through other, competing online travel agencies or through the hotels’ own websites. The Swedish Competition Authority suspected that this type of so-called parity condition constituted a prohibited anti-competitive agreement and initiated two investigations. The investigations related to Booking.com and Expedia.

The case relating to Booking.com was closed through a decision to accept a voluntary commitment from Booking.com. As regards Expedia, the case was closed when the company changed its contractual terms and conditions.

The Swedish Competition Authority performed these investigations in close cooperation with competition authorities in France and Italy. What did this mean?

– We have helped one another in various ways during the investigations. Not least, we have been able to share knowledge and information with one another. The investigations are a good example of how efficient cooperation can be achieved between the competition authorities within the EU, for the benefit of consumers.

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