The UK Bed and Breakfast Association has clarified complaints it has filed to the UK Competition and Markets Authority (CMA) against Booking.com and other online travel agents (OTAs).
The B&B Association alleges ‘rate parity’ clauses imposed on accommodation providers are driving up prices to consumers and that OTAs are misleading consumers with “false discounts” and “false availability claims”.
The association has also complained about “misleading and manipulated default search rankings” and of “forced bidding” by OTAs on hotel and B&B names.
Documents sent to the CMA allege:
“OTAs, especially the Priceline group and the Expedia group, force hotels and B&Bs, using ‘rate parity’ clauses, to charge the commission-inclusive price to guests even where the property sells direct to the guest from its own website and no OTA commission is payable.”
It argues these “anti-competitive clauses prevent hotels and B&Bs charging the net-of-commission price to direct customers and result in the consumer paying more than otherwise”.
OTA commissions are typically 15%-18% “but can be considerably higher”.
The association points out rate parity clauses are banned in France and Germany and states: “They should also be banned in the UK.”
“These appear to show that the room shown, for the night shown, has been discounted by the OTA. In fact, the OTA has no discount for that room night.”
The association calls on the CMA to ban such discounts “and to take effective remedial and enforcement action to protect consumers”.
A third complaint, of “deceiving consumers with false availability statements” relates to Booking.com ‘and others’.
The association cites an example and suggests: “These false statements are illegal under UK law” and “damage transparency and harm consumers.”
A fourth complaint, also about Booking.com and others, is that the OTAs “deceive consumers with misleading, opaque and manipulated rankings . . . in default search results which omit properties that might more closely match the consumer’s requirements”, listing these “in an order designed to benefit the OTA commercially”.
The association provides “a typical example of a manipulated search result” on Booking.com and calls on the CMA “to take effective enforcement action to protect consumers”.
Its final complaint, again against Booking.com and others, is that “OTAs force (by making it a non-optional contract term) hotels and B&Bs to let the OTA bid on the property’s name with Google… so that the top listing on search results for that property’s name is for the OTA, which then benefits by taking commission on all bookings resulting from those clicks”.
The association calls on the CMA to ban such contract terms, limiting the practice to “an optional agreement expressly entered into, independent of the OTA-property agreement”.
Hotels must be allowed to enter a contract with an OTA “but still choose not to agree to let the OTA bid on its own name”, the association tells the CMA.
The competition authority has yet to respond.