The Office of Fair Trading (OFT), a UK government department, has alleged that three of UK’s biggest travel names, Booking.com, Expedia, and InterContinental Hotels Group, have infringed on competition law by restricting the online booking of hotel rooms.
The OFT has issued a Statement of Objections charging Booking.com and Expedia for breaking the law by entering into an agreement with IHG to offer discounted prices of room-only accommodation.
The agency, which had conducted an investigation in September 2010 following a complaint by a small online travel company, feels that such agreements are anti-competition, restrict the entry and expansion of smaller travel agents selling discounted accommodation to customers, and hence break the Competition Act of 1998.
The UK’s Competition Act of 1998 provides a guideline for the recognition and control of restrictive business practices, when utilised by a dominant market leader to control competition.
Clive Maxwell, the OFT chief executive officer, said, ‘We want people to benefit fully from being able to shop around online and get a better deal from discounters that are prepared to share their commission with customers.
The OFT’s provisional view is that Booking.com, Expedia and InterContinental Hotels Group have infringed competition law. However, these are the OFT’s provisional findings only. All parties will now have a full opportunity to respond to our Statement of Objections before we decide whether competition law has in fact been infringed.’
IHG owns around nine hotel brands in round 100 countries, including InterContinental Hotels & Resorts, Hotel Indigo, Crowne Plaza Hotels & Resorts, Holiday Inn Hotels and Resorts, Holiday Inn Express, Staybridge Suites, Candlewood Suites, as well as two new brands, EVEN Hotels and HUALUXE Hotels & Resorts.
