Operators face EU hotels pricing competition probe

Operators face EU hotels pricing competition probe

Leading European tour operators face an EU antitrust probe into “hotel price discrimination” involving Spanish hotel giant Melia.

The European Commission said it had responded to complaints about hotel accommodation, specifically that room availability and prices varied according to where the customer is located.

The investigation concerns agreements between Kuoni, German operator REWE, Thomas Cook and TUI and Melia.

It is one of three separate investigations into suspected anti-competitive practices in e-commerce involving 15 companies suspected of restricting online sales of electronics, video games and hotel rooms to deny consumers choice and prevent them from buying at the lowest prices.

The Commission said it “welcomes hotels developing and introducing innovative pricing mechanisms to maximise room usage”. But it said hotels and tour operators cannot discriminate customers on the basis of their location.

“The agreements in question may contain clauses that discriminate between customers, based on their nationality or country of residence – as a result customers would not be able to see the full hotel availability or book hotel rooms at the best prices.

“This may breach EU competition rules by preventing consumers from booking hotel accommodation at better conditions offered by tour operators in other member states simply because of the consumer’s nationality or place of residence.

“This would lead to the partitioning of the single market.

Thomas Cook said it noted the Commission’s decision to investigate and that it would co-operate fully.

“Across our 15 European source markets, Thomas Cook is committed to fair and open competition,” the group said.

Tui Group said: “We can confirm that the EU Commission’s directorate-general for competition has initiated formal proceedings against Tui, other tour operators as well as hoteliers.

“The Commission is reviewing certain practices between tour operators and hoteliers where hotel offers or hotel prices are set at different levels according to the nationality and/or residence of the customer.

“Tui will fully support the EU authority in the proceedings. By initiating a formal proceeding the EU commission has not taken any decision.”

Melia Hotels said the investigation did not imply any infringement had taken place and that the Commission was simply gathering information.

“Melia will continue to collaborate with the Commission both actively and constructively … trusting in a speedy solution to the procedure that will confirm the absence of any undue conduct concerning the rights of European consumer,” according to a statement from the hotel chain to Reuters.

Companies face fines up to 10% of their global turnover if found guilty of breaching EU rules.

The EU aims to boost online cross-border sales and stop so-called “geo-blocking” – restricting offers based on a customer’s location – which runs counter to its goal of a single market for digital goods and services that would underpin economic growth.

European competition commissioner Margrethe Vestager said: “E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders.

“The three investigations we have opened focus on practices where we suspect companies are trying to deny these benefits for consumers.

“The cases concern the consumer electronics, video games and hotel accommodation sectors.

“More specifically, we are looking into whether these companies are breaking EU competition rules by unfairly restricting retail prices or by excluding customers from certain offers because of their nationality or location.”

The Commission stressed the opening of formal proceedings did not prejudge the outcome and that there was no legal deadline to bringing an antitrust investigation to a close.

 

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