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OFT ‘minded to accept' price parity commitments

20 December 2013 by
OFT ‘minded to accept' price parity commitments

The Office of Fair Trading has opened a consultation on revised commitments regarding price parity put forward by InterContinental Hotels Group (IHG), Booking.com and Expedia.

The proposals, which include hotels offering the same discounts as Online Travel Agents (OTAs), are designed to address competition concerns over OTAs offering room-only hotel rates.

In August the OFT asked for comments from third parties on draft commitments proposed by the three firms. It said it was now "minded to accept these commitments", but again asked for the views of interested third parties.

The revised commitments are:

· Hotel discounting: the commitments clarify that hotels will be allowed to offer discounts in an equivalent manner to OTAs
· Geographic scope: the commitments will apply to bookings made by European Economic Area residents for rooms in UK hotels, rather than to bookings made by UK residents for rooms in EU hotels
· Duration: the commitments will apply for a period of two years, rather than three years

The original statement of objections was issues by the OTA in July 2012. It alleged that Booking.com and Expedia entered into separate agreements with IHG which restricted their ability to discount the rates at which they could offer room-only hotel bookings.

It now believes that the revised commitments address price competition concerns.

Ann Pope, senior director in the OFT's services, infrastructure and public markets group, said: ‘The OFT considers that these revised commitments should inject a meaningful degree of price competition into the online offering of hotel bookings."

The OFT decision comes in light of other similar allegations about OTA agreements and conditions, in which smaller website Skoosh.com alleged that hotels had threatened it with legal action after it discounted rooms instead of offering prices "in line with rate parity".

To comment on the revised commitments email hotelonlinebooking@oft.gsi.gov.uk

Office of Fair Trading accuses IHG, Expedia and Booking.com of limiting price competition >>

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