Our team: Julian Lewis
A House of Lords Select Committee issued a report entitled Online Platforms and the Digital Single Market (see Online Platforms and the Digital Single Market) in response to an EU Commission consultation in relation to the use of market power by the largest online platforms. The report recommends an investigation by the Competition and Markets Authority (CMA) into the online travel sector. The report has particular relevance to the online travel business and has been welcomed by the British Hospitality Association, which is urging the Government to ban arrangements under which hotels are prevented from offering lower rates than those offered on online booking sites – a practice which is banned in France and under scrutiny in Germany.
The Committee has recommended the adoption of rules for the rating and review systems operated by online travel agents (OTAs) to ensure the transparency of the information provided including having publicly accessible policies for handling negative reviews and a clear distinction between user reviews and paid for promotions as well as the implementation of a traffic light-style system to help consumers identify trusted websites.
This may prove to be a milestone (at least in this country) for the ongoing competition between brands and OTAs, and the developments at Commission level suggest that changes in the regulatory environment will follow that may weaken the market strength of the large OTAs across the EU.
Julian Lewis, Partner, Fladgate LLP (email@example.com)