This week’s Update is heavily focused on the EU and its recent enforcement activities.
ETTSA Challenges European Commission’s Failure to Act
("ETTSA Files Complaint Against EU Commission Over Airline Surcharges, MLex, July 19, 2018) (subscription required)
While we don’t regularly feature stories detailing other travel industry members’ distribution challenges, we felt the European Commission’s recent decision to leave intact Lufthansa’s indirect booking surcharges warranted highlighting. Since the Lufthansa policy was adopted in September of 2015, the European Technology & Travel Services Association (ETTSA) (which is comprised of a variety of indirect bookings platforms – GDSs, OTAs, etc.) has taken steps to challenge the policy, including filling an official challenge to the policy with the European Commission soon after the policy was announced. In May of this year, the European Commission announced that it intended to take no action in response to the Lufthansa surcharges or ETTSA’s complaint challenging the surcharge. Angered by the Commission’s failure to act, ETTSA filed a complaint this past week against the European Commission challenging on both procedural and substantive bases the Commission’s failure to act. While this series of events may not have direct application to hotel bookings, it may provide a glimpse into the current thinking of the European Commission toward suppliers’ attempts to better manage their indirect channel partners. More to come, I’m sure . . .
As our Update reveals, Booking Holdings monopolized the distribution headlines this past week.
Booking.com Goes Back to Basics
("Booking.com gets down to Basics, gets rates from other agencies," PhocusWire, July 10, 2018)
Hoteliers’ ongoing efforts to rein in the sometimes abusive distribution practices of certain wholesalers just took on new significance. Booking.com acknowledged last week that is was testing a new service – Booking.Basic – which features deeply discounted rates for certain properties sourced from other distributors (as opposed to the hotels themselves). While initial tests indicate that this new service is largely limited to Asia and features rates obtained from Booking.com partners Agoda and Ctrip, the obvious question is how widespread will this service become. Will the practices of certain wholesalers mean that deeply discounted net package rates will soon find their way to the Booking.com website? Time to review those sourcing provisions in your favorite Booking Holdings contract.
This week’s Update features a variety of stories, including an additional story on last week’s announcement by the UK’s Competition and Markets Authority regarding its recent commenced enforcement efforts against several unnamed OTAs operating in the UK. Our attempts to obtain a list of the OTAs targeted by the CMA were rebuffed last week, so we will just have to wait to see which distributors are in the CMA’s crosshairs. Enjoy.
Good News for Disabled Travelers and the Hoteliers That Serve Them
("Online Travel Players Boost Accessibility for Travelers With Disabilities," Skift Travel News, July 6, 2018)
Skift featured a story last week that detailed efforts being made by both existing and newly established travel websites to accommodate the many challenges experienced by disabled travelers (e.g. inaccessible websites, little or no description of accessible accommodations, etc.). Not only is this good news for disabled travelers, but also the many hoteliers that diligently seek to serve them. For years now, we’ve advised clients that the ADA’s booking requirements impose responsibility for satisfying those requirements solely on hoteliers – irrespective of whether those bookings are made directly with the hoteliers or indirectly through a third party channel. With these latest efforts by third party distributors, hoteliers may have one less concern keeping them awake at night.
This week’s Update features a number of “legal” updates to stories we have been following for some time. Enjoy.
CMA Initiates Enforcement Action Against Booking Sites
("Hotel booking sites could be forced to stop claiming ‘one room left’," Law360 - Hospitality, June 25, 2018)
Following its nearly 8-month (re)investigation of online booking sites operating in the UK, the UK’s Competition and Markets Authority (CMA) announced last week that it was commencing enforcement actions against several unnamed “booking sites” over their alleged anti-competitive practices. According to the CMA, these questionable practices include (1) hotel rankings based on factors unrelated to a consumer’s requirements (e.g., commission levels), (2) pressure tactics that give consumers a false sense of availability, (3) misleading discount claims and (4) hidden charges. The CMA will now seek binding commitments from the offending sites or, in the absence of such commitments, pursue claims in UK courts. As part of its enforcement efforts, the CMA is also referring a number of its concerns to the UK Advertising Standards Authority (ASA) to examine whether the sites’ frequent claims of offering a “best rate guarantee” or the “lowest price” are misleading. It will be interesting to watch (a) how this enforcement effort unfolds and whether other European jurisdictions will soon follow suit – recall that the many anti-trust investigations that led to Booking.com’s and Expedia’s “narrow parity” compromise began with the efforts of CMA’s predecessor, the Office of Fair Trading, and (b) whether this effort results in any changes to global booking sites’ worldwide programs (e.g., Expedia’s Accelerator Program or Booking.com’s Preferred Hotel Programme). The official CMA news release is also available.
This blog post was originally published as a Legal Alert on GSB's website on July 3, 2018. The post was also authored by Victoria Redman, GSB’s 2018 Summer Associate, located in the Seattle office.
On Thursday, June 28, 2018, the California Consumer Privacy Act of 2018 (the Act) passed with resounding support from both Republicans and Democrats, who voted in favor of the bill 73-0-7 in the Assembly and 38-0-3 in the Senate. The Act, which takes effect on January 1, 2020, imposes requirements on the processing and protection of personal data similar to, and in some cases, more extensive than the requirements under the EU General Data Protection Regulation (GDPR), which went into effect on May 25, 2018.
Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.