Online booking clauses still source of concern for Australian competition authority

12 April 2018 8:28am

11 April 2018. By Lewis Crofts.

The way online travel agents use contractual clauses to manage the price and availability of hotel rooms is still attracting the concern of Australian antitrust officials despite steps to temper the impact of the conduct.

Roger Featherstone, a commissioner at the Australian Competition & Consumer Commission, said on Wednesday that new companies could find it difficult to enter the market because of clauses that set a price floor, known as 'most-favored nation' clauses. 

"It is still a concern for us," he told a conference* in Washington, DC.

"We believe, in that particular market, they are widespread and are likely to discourage entry because a new entrant can't offer better prices."

Enforcers across the globe have cracked down on companies such as Booking.com and Expedia for such conduct. 

Last May, the ACCC reopened its investigation into the two companies following a High Court decision that an online travel agent was in fact competing with the airlines whose flights it sold. 

In Australia, Featherstone said two of the largest online travel agents had moved to relax the clauses to give greater pricing flexibility. 

But this appears not to have gone far enough. 

"We are still looking at that market. We still have some concerns about it," Featherstone said. 

Last week, an Australian court imposed a an A$12 million ($9.25 million) fine on Flight Centre, the company involved in the High Court appeal, for five price-fixing offenses.

Global Privacy in 2018