Booking.com is currently under scrutiny by Italy's competition watchdog (AGCM) for potential abuse of its dominant position in the market. The investigation comes amidst concerns that Booking.com's practices may hinder fair competition and lead to higher prices and reduced choices for consumers.
According to Reuters, AGCM has started a probe to examine Booking.com's handling of hotels participating in its Preferred Partner Programme. The watchdog suspects that Booking.com's actions could restrict effective competition in the online hotel booking sector, particularly on a national scale in Italy.
The authority believes that such practices could negatively impact accommodation facilities and ultimately harm consumers by limiting options and driving up prices.
The investigation took a significant turn when Italian tax police, the Guardia di Finanza, conducted searches at Booking.com's offices in Italy, suggesting a heightened level of scrutiny and potential legal consequences for the company.
(Photo : Lionel BONAVENTURE / AFP)
A picture shows screens displaying the logo and the website of the online travel and accommodation services platform Booking.com in Toulouse, southwestern France on January 25, 2023.
Booking.com's Alleged Antitrust Violations
Other reports reveal that AGCM is particularly concerned about Booking.com's alleged practice of adjusting accommodation prices on its platform without obtaining consent from the hotels involved.
This behavior, if proven, could be seen as a tactic to stifle competition by undercutting prices offered by other platforms, thus potentially monopolizing the market.
In response to these allegations, a Booking.com representative has stated that it is fully cooperating with the authorities. However, the company firmly believes that competition concerns should be addressed at the European Union level, in accordance with existing regulatory proposals, rather than on a country-by-country basis.
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Previous Reports
Earlier this year, Booking Holdings, the parent company of Booking.com, is grappling with a $530 million fine imposed by the Spanish competition authority for alleged infringement of competition law in Spain.
Skift reports that Booking Holdings CEO Glenn Fogel has vehemently contested the fine, labeling it as disproportionate and arbitrary. The company intends to appeal the decision, a process that could span several years and necessitate alterations to its business practices in Spain.
Moreover, Booking.com faces additional regulatory challenges from the European Union under the Digital Markets Act, signaling a broader scrutiny of its operations across the continent.
In the Netherlands, Booking Holdings encountered another setback when an appeals court ruled that Booking.com qualifies as a travel agency, obliging it to enroll its employees in a travel industry-wide pension fund. This ruling, coupled with a $276 million loss related to pension fund matters, underscores the complex regulatory landscape that Booking.com navigates.
Despite these challenges, Booking.com continues to expand its offerings, with its short-term rental segment experiencing notable growth. In 2023, Booking.com's short-term rentals reached 7.4 million, comprising a significant portion of its total room nights and rivaling industry leader Airbnb.
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