The competition regulator in the UK has recently claimed that Booking.com, Intercontinental Hotels and Expedia have breached competition laws about discounting. The Office of Fair Trading recently stated that these organisations might have signed an agreement about the discounting of rooms which would not be in line with competition laws.
The provisional view of the OFT is that all of these companies have infringed the competition laws. They had an arrangement which allegedly violated the rules between 2007 and 2010. The idea was that they would limit the price competition occurring between these different operators and online travel agents.
IHG owns 4500 hotels including the Holiday Inn brand. The investigation is focused on these three groups however the OFT has stated that this is a problem that could be more widespread in the industry and that other organisations could be subject to investigation.
The online travel agency sector in the UK, is the largest of its kind in Europe and it is estimated that in 2010 the amount of revenue brought in through the service was around £10 billion. The chief economist for the OFT, Clive Maxwell has stated, “People should be able to shop around at different travel agents until they find the best deal. This arrangement between these different companies meant that people were less able to do that, which is not fair on the customer.”
IHG has recently released a statement in which they said that they were not in violation of any competition laws and that they are going to be co-operating fully with the investigation, which they have been doing since it began in 2010. Information has been gathered and the OFT is expected to reach a decision soon.