Expedia, Booking.com, and Hotels Group get served by OFT

The Office of Fair Trading (OFT) followed up its formal investigation of online travel agencies Booking.com and Expedia Inc. with a Statement of Objections – alleging that the companies made individual agreements with InterContinental Hotels Group (IHG) to limit price discounts on room only hotel accommodations. Concerned with both barriers to entry and expansion (the original complaint was filed by a small online booking agency) and limitations on price competition between online agents, the OFT’s provisional finding is that the agreements violate competition law. The OFT has found the practice may be widespread – the implications of a final rule against these agreements in the online travel industry are substantial.

The transaction value of UK hotel accommodation booked through online travel agents amounted to approximately £849m in 2010. The UK’s online travel agency sector is the largest in Europe. UK online travel agency gross turnover amounted to approximately £5.3billion in 2010, and UK hotel room revenue amounted to approximately £10.1 billion in that year.

Full content: OFT

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