The European Commission has launched an investigation into whether consumers are able to enjoy cross-border choice and buy accommodation at competitive prices.
Following complaints from customers, the EC is investigating agreements between the largest European tour operators, including Kuoni, REWE, Thomas Cook and TUI and Meliá Hotels.
The EC said that it had launched three investigations, including that into accommodation, aimed at tackling retail price restrictions, discrimination on the basis of location and geo-blocking.
The EC added that, while it welcomed hotels “developing and introducing innovative pricing mechanisms to maximise room usage” but that hotels and tour operators could not discriminate customers on the basis of their location. It said that the agreements in question might contain clauses that discriminated between customers, based on their nationality or country of residence – and that as a result customers would not be able to see the full hotel availability or book hotel rooms at the best prices.
This, it said, could breach EU competition rules by preventing consumers from booking hotel accommodation at better conditions offered by tour operators in other member states simply because of the consumer’s nationality or place of residence, which would lead to the partitioning of the Single Market.
Meliá Hotels International told us that, although the investigation affected other operators within the hotel sector, the same also applied to other completely different activities, including manufacturers of electronic consumer devices and video games.
The company said: “The investigation by the Commission, as explained in the notification received, does not imply the existence of any infringement. They have simply initiated a process named as such in order to obtain more information regarding the matter in question.
“Meliá will continue to collaborate with the Commission both actively and constructively, as they have been doing until now, offering any clarification necessary regarding this matter and trusting in a speedy solution to the procedure that will confirm the absence of any undue conduct concerning the rights of European consumers.”
Thomas Cook also said that it would co-operate, adding: “Across our 15 European source markets, Thomas Cook is committed to fair and open competition.”
TUI Group said: “We can confirm that the EU Commission’s directorate-general for competition has initiated formal proceedings against TUI, other tour operators as well as hoteliers. The Commission is reviewing certain practices between tour operators and hoteliers where hotel offers or hotel prices are set at different levels according to the nationality and/or residence of the customer.
“TUI will fully support the EU authority in the proceedings. By initiating a formal proceeding the EU commission has not taken any decision.”
EC commissioner Margrethe Vestager, in charge of competition policy, said: “E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders. The three investigations we have opened focus on practices where we suspect companies are trying to deny these benefits for consumers.
“More specifically, we are looking into whether these companies are breaking EU competition rules by unfairly restricting retail prices or by excluding customers from certain offers because of their nationality or location.”
The EC said that, although more and more goods and services were traded over the internet worldwide, cross-border online sales within the EU are only growing slowly. The EC’s Digital Single Market Strategy has identified a number of regulatory barriers that hinder cross-border e-commerce and proposed different initiatives to address these.
However, it added that were also indications that businesses may themselves establish barriers to cross-border online trade, “with a view to fragmenting the EU’s Single Market along national borders and preventing competition”. The EC has launched an inquiry to gather market information in order to better understand the nature, prevalence and effects of these barriers and to assess them in light of EU antitrust rules.
HA Perspective [by Katherine Doggrell]: The current investigation by the EC calls to mind the 2012 story that Orbitz Worldwide was showing Apple users higher travel prices because, well, if you’re prepared to pay a premium for brushed titanium, what won’t you pay a premium for.
Now, as Apple users in the UK again pay a premium as a result of the computer company reacting to the currency changes since the EU Referendum, it transpires that we could also all be paying more for travel, depending on where we live.
The EC is not such a fan, enthused as it is about the Single Market. For those in the UK who don’t value the Single Market as highly, one to watch for potential opportunity come 2019.