Skift Take
Should Booking.com have the right to compel Spanish hotels what rates they can charge on their own websites? That is the heart of the issue.
Spain’s competition authority in February levied a draft fine of $530 million against Booking.com, but issued a final ruling today lowering the penalty to around $446 million.
In its announcement Tuesday, the CNMC didn’t specify why it lowered the fines some $90 million.
Parent company Booking Holdings already took a $530 million loss for the penalty in the fourth quarter of 2023.
The CNMC said Tuesday that Booking.com “committed two abuses of its dominant position,” starting January 1, 2019. The regulator said Booking.com’s hotel market position in Spain has fluctuated since 2019 from 70-90%.
The regulator alleges that Booking.com imposed anticompetitive commercial conditions on hotels and stifled competition from other online travel agencies.
A Booking.com spokesperson vowed to appeal the fines.
The regulator said Booking.com barred participating hotels from offering lower prices on their own websites than on Booking.com. In addition, the CNMC charged that Booking.com wasn’t transparent about profitability when hotels participated in plans — called Preferred and Preferred Plus — to increase their visibility on Booking.com or when participating in the company’s Genius loyalty program.
In addition, Booking.com allegedly hampered competition from online travel agencies because it made hotel visibility, or where properties appear in search results, on Booking.com dependent on reservations volume.
The $446 million penalty is actually divided into two fines, of an equal amount.
Booking Holdings Will Appeal
Booking Holdings argues that such competition issues should be the purview of the entire European Union, and not be litigated on a country by country basis. Spain is an EU member.
Airbnb takes a similar position in Europe when it comes to regulation, arguing for uniform rules and not each country having the wherewithal to issue their own rulings.
Booking Holdings stated Tuesday: “We strongly disagree with the outcome of the CNMC investigation and intend to appeal this unprecedented decision. We have said before that the EU’s Digital Market Act is the right forum to discuss and assess the majority of these issues, presenting an opportunity to agree on solutions that apply across Europe rather than country by country.
“Booking.com operates in a highly competitive sector, and in an industry characterized by a high degree of choice for businesses and consumers alike. We offer accommodation partners support programs such as our Preferred Plus and Genius that they can opt into. The decision today by the CNMC does not take this into account, adding to a lack of consistency for consumers and accommodation partners in Spain, against a global backdrop.”
The penalties stemmed from a 2021 complaint filed by the Spanish Association of Hotel Managers and the Madrid Hotel Business Association.
