1 month ago
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Booking.com, the world’s biggest accommodation platform, has dropped legal action against the Competition Commission over its Online Intermediation Platforms Market Inquiry (OIPMI) findings and agreed to fall in line with its recommendations.
Booking.com was challenging the report in both the High Court of South Africa and at the Competition Tribunal.
In a statement on Tuesday, the commission welcomed Booking.com’s undertaking to fulfil its remedial actions “as agreed”, which includes removing price parity terms from all contracts with accommodation providers in South Africa, and from criteria in its incentive or any other membership programmes.
The commission had launched OIPMI on 19 May 2021 to assess whether features in B2C online platform markets were hurting competition between platforms and between businesses using ecommerce, online travel agencies, food delivery, app stores, property and automotive classifieds platforms.
When the commission released its report on 31 July last year relating to online platforms, it accused Booking.com, Google, Apple, Uber Eats, Takealot and a range of service providers of stifling competition.
Acknowledging Booking.com as the world’s largest online travel agent for traditional hotel and accommodation establishments “by a huge distance”, the commission said it imposed “wide price parity” conditions on hotels and other establishments which require them to offer room prices to the platform that are no less favourable than the room price offered to other establishments.
In the EU, Booking.com has removed wide price parity clauses but it was still applying them in SA. It was also imposing “narrow price parity” terms in this country preventing hotels and other establishments from pricing lower on their own websites for online bookings.
To address this, the inquiry wanted these price parity obligations to be removed. It also accused Booking.com of a lack of diversification, which distorts competition from black communities, and wanted it to introduce programmes to encourage black-owned SMEs.
Booking.com told Daily Maverick at the time that it is disappointed with the findings as it feels strongly that its practices guarantee a transparent and consistent experience for consumers.
“At Booking.com it is a priority for us to keep prices competitive and allow for a consistent price comparison experience for travellers, while simultaneously offering benefits to accommodation partners who continue to benefit from much-needed customer demand we can bring from around the world. We continue to have an open and positive dialogue with the South African Competition Commission, while we consider our next steps.”
Having reached an agreement, the commission said removing both these parity clauses would enhance price competition between online travel agents, allow accommodation providers to price lower on their own websites for online bookings, and ultimately benefit consumers.
Booking.com will also put in place programmes benefiting black-owned SMEs.
The commission said it was pleased with the “positive outcome” of the consultations with Booking.com and the “amicable, collaborative engagements with the platform and its representatives”.
“The commission is hopeful that the agreed-upon terms will encourage the four other firms that have brought appeals against the OIPMI remedial actions to settle with the commission.”
A Booking.com spokesperson said they were pleased to have reached an amicable agreement with the commission.
“We look forward to continuing to work with all of our accommodation partners in South Africa, driving demand to their businesses while implementing measures specifically aimed at further supporting SMEs that are owned by historically disadvantaged persons (HDP) or HDP communities.” DM
