We reported in September that following a successful appeal by third party meta-search site Skyscanner, the Competition Appeals Tribunal (CAT) struck down a package of commitments agreed between Expedia, Intercontinental Hotels Group (IHG), booking.com and the OFT (now the CMA). The CAT struck down the commitments on the grounds that the package of measures agreed between the parties would have an effect on third parties (such as Skyscanner) who had not signed up to the commitments.
The CAT held that the CMA had failed to follow due process when agreeing the commitments. In particular, the CMA had treated Skyscanner unfairly by not adequately investigating Skyscanner’s arguments and through its insistence on Skyscanner having to file an unreasonable amount and types of evidence to back up their case.
Following the ruling, the case was remitted back to the CMA for further examination in light of the CAT’s judgement.
On 28 October 2014, the CMA announced that it had re-opened its investigation into online hotel bookings. It is entirely possible that the investigation will take a very different shape this time around. Since early 2014 when the original commitments were agreed, the European regulatory landscape with regard to online hotel booking has become more aggressive, as we reported in this post. Chiefly amongst European regulators is the fear and belief that best price or price parity clauses (agreements whereby one party promises another to always offer its best rates or terms for a product or service) dampen price competition and exclude lower price competitors from entering the market.
It is within the realm of possibility that rather than accepting commitments from various market leaders such as booking.com, the CMA may instead this time elect to dispose of this case by way of a decision condemning price parity clauses which are the subject of the investigation. The UK regulators next move in this investigation will be watched closely by those companies in the hospitality industry.