8th February 2019
CMA investigation prompts major hotel booking sites to change their behaviour
Last year, the Competition and Markets Authority (CMA) launched an investigation into the practices of some of the biggest hotel booking sites, namely Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago. The CMA was concerned that certain methods used by the booking sites (such as creating a false impression of a room’s popularity, or not displaying the full cost of a room upfront), were misleading consumers, and could potentially fall foul of consumer protection law.
One of the CMA’s key roles is to enforce consumer protection legislation, to tackle practices and market conditions which make it difficult for consumers to exercise choice. While it can only take enforcement action through the UK courts, its investigations often result in organisations agreeing operational undertaking to avoid legal proceedings. In this case, all of the booking sites under investigation have co-operated with the CMA, and have voluntarily undertaken to abide by the following principles:
- Making it clearer how hotels are ranked in search results. For example, informing consumers when search results are affected by the amount of commission a hotel pays the site.
- Not giving a false impression of the availability or popularity of a hotel, or rushing customers into making a booking decision based on incomplete information. For example, when highlighting other customers are reviewing the same hotel, clarifying they may be searching for different dates. Sites have also committed to remove sold out hotels within search results to put pressure on people to book more quickly.
- Being clearer about discounts and only promoting deals which are actually available at that time. Examples of misleading discount claims include comparing a higher weekend room rate with a weekday rate or comparing the price of a luxury suite with a standard room.
- Displaying all compulsory charges such as taxes, booking or resort fees in the headline price. Price can still be broken down, but the total amount the customer has to pay should always be shown upfront.
The deadline for the six booking sites to comply with the above commitments is 1 September 2019. The CMA has stated it will be monitoring the booking sites and will be writing to other hotel booking sites including online travel agents, metasearch engines and hotel chains, setting out clear expectations for how they should be complying with consumer protection law. The CMA also expects these sites to make necessary changes by 1 September 2019. Ultimately, if the changes are not implemented, the CMA may take enforcement action against any hotel booking sites it considers may be breaking consumer protection law.
At Hamlins, we have experience in advising clients in a variety of sectors, including the travel and leisure sectors, on compliance with consumer protection law and the latest guidance from the relevant regulatory bodies. Examples of areas in which we regularly advise our clients include: drafting and/or reviewing terms and conditions of business and advising on marketing strategies.
For further information on how Hamlins can add value to your business, or if you require specific legal advice relating to a commercial matter, please contact Alexandra Cooke.