A decision by the UK’s former competition authority, the Office of Fair Trading (OFT – now replaced by the Competition and Markets Authority (CMA)) to accept commitments to settle its investigation into on-line prices for hotel rooms has been quashed by the UK Competition Appeal Tribunal and sent back to the CMA to decide again.
As noted in a previous alert on the case, a striking feature of the commitments given to resolve the original investigation was the absence of a clear commitment regarding MFN or price parity clauses which oblige hotels to guarantee that a website is being offered the best price by the hotel. Indeed, a feature of the commitments was that, although websites would henceforward be allowed to discount room prices by sacrificing a part of their commission, the websites could be obliged to keep these deals secret by limiting them to certain classes or “clubs” of customers. Price comparison sites, such as the appellants, Skyscanner and Skoosh (also the original complainant) had made the point to the OFT that the effect of hiding these discounts was that the discounted prices would not be picked up by the search tools used by price comparison sites, thus restricting transparency and competition.
Click here to read the full issued Client Alert.
