Everyone who books a hotel room benefits, now that the market-leading online travel agency Booking.com has committed to change its contracts with hotels in order to address competition concerns. The Swedish Competition Authority has approved the commitments.
The Swedish Competition Authority has investigated the online travel agency sector. Online travel agencies operate internet platforms, on which consumers can search for, compare and book hotel rooms. Hotels only pay online travel agencies commission when a booking is made.
The investigation concerned so called price parity clauses in the agreements between Booking.com and hotels on the Swedish market. Over the course of the investigation, the market leader Booking.com has offered commitments to change the clauses of its agreements in order to address the competition concerns identified by the Swedish Competition Authority.
“It is very positive that we can create better conditions for effective competition this way. In the long term, it's the customers, the hotel guests, who stand to gain.” commented the Swedish Competition Authority's Director-General, Dan Sjöblom.
The commitments primarily mean that Booking.com may not require that the room prices that hotels offer on Booking.com are the same as or lower than the prices they offer via Booking.com's competitors. This restores competition between online travel agencies.
The Swedish Competition Authority's investigation has been coordinated with the national competition authorities of France and Italy, where corresponding commitments have been approved. The European Commission has assisted the competition authorities in this coordination.
The Swedish Competition Authority’s Director-General Dan Sjöblom and his counterparts in France and Italy, Bruno Lasserre and Giovanni Pitruzzella said in a joint statement:
“With coordination from the European Commission, our three authorities have collaborated in an unprecedented way in our investigations into online hotel reservation platforms. Today, we can announce that we have decided to approve commitments offered to us by the market leader, Booking.com. The commitments have been significantly improved following a market test. These new commitments limit Booking.com's use of price parity as part of its commission-based business model and substantially increase the hotels' margin for maneuver. The commitments offered by Booking.com strike the right balance for consumers in France, Italy and Sweden, restoring competition while at the same time preserving user-friendly free search and comparison services and encouraging the burgeoning digital economy.”
For further information, please contact:
Jimmy Dominius, Press Secretary tel +46(0)8-700 15 80 or +46(0)76 542 15 80
Martin Mandorff, Head of Unit, tel +46(0)8-700 15 53