On 31 July 2012, the UK Office of Fair Trading (OFT) issued a Statement of Objections (preliminary statement of its case) alleging that two online travel agents and InterContinental Hotels Group (IHG) have infringed UK competition law in relation to the supply of room-only hotel accommodation. Details are limited, but the specific allegation is that the two agents both entered into separate arrangements with IHG which restricted their ability to discount the price of room-only hotel accommodation.
This therefore seems to be a type of resale price maintenance case. The IHG chief executive has stated that “[the two online travel agents] have an agency relationship with us. They don’t buy the product – they sell the rooms on our behalf and we pay them a commission. That’s how the industry works . . .”.
Under UK and EU competition law, if an agent is a ‘true agent’ (essentially, one which takes on no risk in relation to the products or services it sells for its principal), then the principal is free to set the price and other terms and conditions on which the agent deals, so a restriction on discounting would not be a concern. The case must therefore involve other issues, but it serves as a reminder that agency relationships in the EU must be very carefully handled from a competition law point of view.