Judgement reserved on appeal against OFT investigation into illegal rate parity

01 August 2014 by
Judgement reserved on appeal against OFT investigation into illegal rate parity

A judgement has been reserved following an appeal by online travel agent (OTA) Skyscanner against the Office of Fair Trading's investigation into illegal rate parity involving the InterContinental Hotels Group (IHG), Booking.com and Expedia.

Following a two-year inquiry, the OFT, now the Competition and Markets Authority (CMA) announced in January that online travel agents (OTAs) and hotels would be able to offer discounts on rates for hotel rooms, after IHG , Booking.com and Expedia agreed to formal commitments.

The stipulations involved customers signing up to the membership scheme of an OTA or hotel to be able to view specific discounts, and customers making one undiscounted booking with the OTA or hotel in question to be eligible for future discounts. It was agreed that the discounts offered by OTAs will be funded through their commission or margins.

After accepting the commitments, the OFT closed its investigations.

However, Skyscanner objected to these commitments, claiming they not only allowed competition restrictions to remain, but also introduced a new one preventing the advertisement of available discounts.

At a two-day appeal held at the Competition Appeal Tribunal in London yesterday, Skyscanner applied to quash the original decision by the OFT and force the CMA to re-open the case. It argued that the OFT was wrong not to go ahead with a full infringement hearing.

Skyscanner was supported at the tribunal by Skoosh, the independent OTA which brought the original complaint to the attention of the OFT.

Martin Couchman, deputy chief executive of the British Hospitality Association, said there is the possibility that the outcome of the appeal will result in the original OFT investigations going back to square one.

"However, it is interesting to note that that there has been no obvious impact on hotel operators as a result of the original OFT decision," he said.

OFT accepts price parity commitments from IHG and OTAs >>

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