The BHA is calling for an immediate inquiry into online travel agents by the CMA

“The BHA welcomes the House of Lords Report which recommends greater accountability and transparency of online travel agents. These OTAs wield vast power and hold our industry hostage by commanding punitive rates of commission. We are pleased that this influential committee is proposing Europe wide steps to enable our industry to challenge anti-competitive online practices when they arise. The BHA calls upon the government and policy makers in the European Commission to support our lobbying in this area and get engaged – this is a significant step forward for our industry and we want to see the momentum continue," said Chief Executive of the British Hospitality Association, Ufi Ibrahim.

Background

The Report by the House of Lords Select Committee is called Online Platforms and the Digital Single Market. It is a response to the EU Commission consultation on how the largest online platforms use their market power and whether current regulation and competition law is effective in the digital economy.

The British Hospitality Association has called for:

  • an outright ban on rate parity clauses - which prevent hotels from offering lower rates than those on the online booking sites where they are listed. This practice impacts directly on consumers since it means less competitive pricing with similar room rates offered by online travel agencies and hospitality venues across the board. Rate parity clauses are already illegal in France and were found to be anti- competitive in cases brought against Booking.com and HRS in Germany;
  • more effective and speedier methods for resolving competition and consumer protection issues and codes of practice for online platforms;
  • transparency for consumers in rankings, ratings, reviews.

The Report recommends:

  • critical scrutiny by competition authorities of parity clauses and recommends that the Competition and Markets Authority urgently order a market investigation into the online travel sector;
  • a speedier process for resolving competition law questions, proposing interim measures be used to stop anti - competitive practices, time limits be applied to negotiations and the development of sector based codes of practice;
  • the European Commission amend the Unfair Consumer Practices Directive so that platforms are required to provide the criteria on which they provide ratings and search results and their policies for handling negative reviews, as well as clearly distinguishing between user reviews and paid promotions.

The British Hospitality Association has worked on behalf of the industry to persuade government to take a long, hard look at anti-competitive behaviour in the digital travel sector.

The next step is for the Competition and Markets Authority to adopt the Report's recommendations to make sure that the travel and hospitality sector is a truly competitive marketplace, which is, after all, in the best interests of the consumer.

 

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