There’s significant debate surrounding Booking.com’s compliance with the Digital Markets Act (DMA). Here is a brief analysis:
Booking.com’s DMA Compliance Report
On November 14, 2024, Booking.com, as a designated “gatekeeper” under the DMA, was required to submit a compliance report outlining the measures taken to adhere to the new regulations.
This report was meant to demonstrate Booking’s full and effective compliance with the DMA’s requirements.
Key Changes Announced by Booking.com
In it’s compliance report, Booking.com calls out some of the changes including the ones below:
Removal of Parity Clauses: Hotels and other travel service providers are now free to offer different prices and conditions on their own websites or other channels compared to Booking.com
Data Access: Hotels and travel services will have real-time and continuous access to data generated by them and their customers through Booking.com
Data Portability: Business users can now transfer data generated on Booking.com to alternative platforms
Industry Challenges and Criticisms
Despite these announced changes, industry bodies, particularly HOTREC (the European umbrella association for hotels, restaurants, and cafes), have raised several concerns:
Incomplete Compliance: HOTREC believes that Booking.com’s compliance report fails to address several obligations identified under the DMA
Superficial Changes: Some changes introduced by Booking.com have been labelled as superficial or unaddressed altogether
Forced Pre-payment Option: A point of contention is the continued forced use of Booking.com’s pre-payment option for hotels, with no alternative given to consumers
Lack of Transparency: There are ongoing concerns about the lack of transparency surrounding Booking.com’s algorithms
Interface and Ranking Issues: Critics argue that Booking.com has failed to make significant changes to its website interface and address issues regarding ranking
Implications and Next Steps
Potential Non-Compliance Investigation: HOTREC has urged the European Commission to initiate a non-compliance investigation against Booking.com immediately
Commission’s Role: The European Commission will carefully analyse the compliance report and assess whether the implemented measures are effective in achieving the DMA’s objectives
Possible Enforcement Actions: If the Commission finds Booking’s solutions non-compliant, it can take formal enforcement actions, including fines of up to 10% of the company’s total worldwide turnover, which can increase to 20% for repeated infringements
Market Dominance Concerns: With Booking.com holding over 70% of the online travel agency market share in Europe, the outcome of this compliance debate could have significant implications for the industry
Watch this space!
The European Commission’s assessment of Booking.com’s compliance and potential actions in the coming months will be crucial in determining the effectiveness of the DMA in creating a more fair and competitive digital market in the travel industry.
To complicate matters, DMA’s impact on Google and its compliance has impacted hotel direct bookings negatively. While DMA is clearly a force for good, it appears that there will be collateral damage and unintended consequences to work through.