More tech antitrust activity: Spain’s competition watchdog has opened an investigation into potential anti-competitive behavior by the Dutch online travel agency giant, Booking.com, following a couple of complaints lodged by the Spanish Association of Hotel Managers and the Regional Hotel Association of Madrid.
The national competition regulator said today that it will look into whether certain practices by Booking.com constitute an abuse of a dominant position in the provision of intermediation services to hotels — and therefore whether it is imposing unfair trading conditions on hotels located in Spain and imposing commercial policies that may have exclusionary effects on other online travel agencies and online sales channels.
The Comisión Nacional de Los Mercados y La Competencia (CNMC) also said it will investigate whether Booking.com’s conduct includes practices that constitute an exploitation of a position of economic dependency of hotels in Spain — and, therefore, amounts to “unfair competition acts affecting public interest due to the distortion of free competition they have produced”, as its press release puts it.
“After reviewing the complaints received and information gathered under the preliminary investigation, the Competition Directorate of the CNMC considers that there are grounds to support the possibility that Booking.com B.V. may have breached articles 2 and 3 of the SCA [Spanish Competition Act] and article 102 of the TFEU [Treaty on the Functioning of the European Union],” the CNMC added.
Booking.com was contacted for comment. Update: The company has now sent this statement:
“We have and will continue to partner with the CNMC on their questions regarding Booking.com Spain. Booking.com has always and will continue to work collaboratively with our accommodation partners in the travel ecosystem, which has only recently seen signs of recovery as we enter a further uncertain future with the global economic environment. We continue to work tirelessly to secure and deliver much needed demand for our accommodation partners, helping them fill their rooms every day.”
The Spanish watchdog has up to 18 months to conduct its investigation and reach a final decision. It also noted that the opening of formal proceedings does not prejudge the final result.
The market power of Booking.com, a veteran of the first wave of Internet startups, in the travel space has long been a cause concern for European Union lawmakers — apparently helping to compel a recent reboot to the bloc’s antitrust regime which is due to kick off next year.
Booking.com is a likely contender for being designated as a gatekeeper under this pan-EU Digital Markets Act (DMA) — which would trigger an ex ante regulation of its core platform service, requiring compliance with a set of up-front operational measures and conditions across its regional operations which are aimed at ensuring fair dealing with other businesses that rely on the platform to reach their own customers.
However the DMA is unlikely to immediately speed into action next year as the process of designating gatekeepers will take several (or even many) months as the Commission steps up to fulfil a new role regulating Big Tech.
That means that, in the meanwhile, national competition probes — such as the one announced today by Spain’s CNMC — have to fill the gap. In this case by relying on established (slower) competition regulation tools which typically require a robust investigation of a complaint prior to any intervention — a process that can take years for any necessary corrective orders to be made.