- Booking.com was fined €413.24 million by Spain’s antitrust watchdog.
- CNMC claims Booking.com abused its market position over five years.
- The company plans to appeal, citing EU Digital Markets Act considerations.
Spain’s anti-trust agency, CNMC, has fined Booking.com €413.2 million (details in Spanish). The online reservation group, part of Booking Holdings, is accused of exploiting its dominant position in Spain’s market. According to CNMC, Booking.com has held a 70%- 90% market share since 2019 and imposed unfair conditions on hotels, limiting competition.
Booking Holdings announced its intent to challenge the fines, arguing the outcome of CNMC’s investigation is debatable. The company believes the European Union’s Digital Markets Act should address these issues rather than individual country rulings.
Details of the Violations
- Booking.com has maintained a market share of 70-90% in Spain during the examined period.
- In 2021, hotel associations accused Booking.com of abusing its dominant position.
- The CNMC found evidence of anti-competitive actions by Booking.com.
Exploitative Dominance
Booking.com imposed several unjust terms on Spanish hotels:
- A pricing condition prevents hotels from offering lower prices on their websites than on Booking.com, while Booking.com could independently lower these prices on their platform.
- Clauses establishing that only the English version of Booking.com’s General Terms and Conditions are legally binding, that Dutch law governs these terms, and that Amsterdam courts handle disputes.
- Non-transparent information regarding the impact and profitability of subscribing to Preferred, Preferred Plus, and Genius programs, which can improve a hotel’s ranking on Booking.com in exchange for higher commissions or discounts on the best-selling rooms.
Exclusive Dominance
Booking.com restricted the competition by:
- Using the total number of bookings as a ranking criterion, thus pressuring hotels to focus their online bookings through Booking.com to maintain their ranking.
- Requiring performance metrics, primarily based on profitability for Booking.com, as the main criteria for accessing or staying in the Preferred and Preferred Plus programs. This compels hotels to concentrate business on Booking.com, sidelining competing agencies.
Impact of Practices
- Hotel Pricing Constraints: Unfair terms stopped hotels from offering lower prices on their websites. Booking.com can lower prices themselves, and disputes under Booking.com’s General Terms and Conditions are subject to Dutch law, which incurs unfair litigation costs for Spanish hotels.
- Lack of Transparency: Inadequate information leaves hotels unable to make informed decisions about subscribing to the Preferred, Preferred Plus, and Genius programs, which are crucial for their operations in Spain.
- Restricted Competition: Using booking totals and performance requirements as ranking and program access criteria stifles competition, preventing hotels from accessing better commercial terms with other online travel agencies.
Booking.com must respond within two months. Meanwhile, similar investigations are underway in other countries, including Italy, examining the impact of Booking.com’s practices on local markets.
