Brazilian watchdog asks Booking.com, Expedia to respond to hotel pricing complaint
2 August 2016. By Carolina Guerra.
The Brazilian antitrust authority has asked online travel agencies Booking.com, Decolar.com and Expedia to respond to allegations by a sector association that they hinder competition by imposing unfair pricing conditions on hotels.
The sector association, known as Fórum de Operadores Hoteleiros do Brasil, or FOHB, filed a complaint with the Administrative Council for Economic Defense, or CADE, stating that the companies impose anticompetitive clauses in contracts that cover tariffs, availability and conditions.
The association said that a hotel that offers its services via online travel agencies cannot offer better pricing conditions through its own platforms.
Before deciding whether to accept the complaint, CADE has given Booking.com, Decolar.com and Expedia until Aug. 12 to answer the FOHB’s allegations.
“Certain hotel networks affiliated with FOHB are being harmed due to these clauses imposed by those companies,” according to FOHB’s July 28 complaint.*
“Hotels that eventually chose to neglect the conditions included in these contracts tend to receive lower platform rankings … or they are excluded from search mechanisms on those platforms,” FOHB said.
“In case there were no such obligation by Booking.com, Expedia Brazil and Decolar.com, hotel groups would see themselves freed and unimpeded to set prices in their direct channels … and prices could be less expensive,” FOHB added.
The association estimates that Booking.com, Decolar.com and Expedia represent a combined 90 percent market share in Brazil.
FOHB, whose members represent 637 hotels in 150 Brazilian cities, said that the online travel websites are fundamental for booking purposes and it’s not possible to consider a market without their services.
The association recommended that CADE take the issue to a Justice Ministry body, the National Consumer Secretariat, or Senacon.
Similar cases are also being reviewed by European competition authorities.