On 23 December 2024, the Italian Competition Authority (“ICA”) closed, with commitments, the investigation against Booking.com on alleged abuse of dominant position on the market for online intermediation and reservation services for relevant partners (hotels and other accommodation facilities).

The ICA investigation concerned two allegedly abusive conducts: one relating to Booking.com's management of its premium partner programs, and the other concerning the application of the so-called “Booking Sponsored Benefit” (“BSB”), which allows Booking.com to apply - without the consent of the hotel - a discount, to align the offer on its platform with the best available online offer. According to the ICA, Booking.com allegedly implemented a complex and unitary abusive strategy in order to disincentivise hotels from differentiating prices between the various online sales channels (e.g. hotel websites and online travel agencies (“OTA”)).

Booking.com, according to the ICA, required the application of ‘competitive’ prices on its own platform with respect to those offered on other websites as an explicit and/or implicit requirement for hotels to be able to enter and remain in its premium program (so called “PPP(+)”), thus limiting the pricing freedom of the most remunerative accommodation structures.

Such conduct was deemed to have severe competitive concerns in the relevant market, given that hotels consider their participation in premium programs essential to obtain: (i) greater visibility in the Booking.com platform's search results and, consequently, (ii) greater earnings.

The commercial strategy implemented by Booking.com also appeared to produce exclusionary effects, by hindering the growth of competing OTAs and disincentivising new OTAs from entering the market, as they were not able to counter the dominant operator with ordinary market tools (e.g. by offering facilities lower commissions in exchange for cheaper room prices on their sites). 

With respect to premium programs, Booking.com committed, among others: 

1. not to introduce an obligation for relevant partners to charge external prices equal to or higher than those charged on Booking.com's platform in order to enter and/or remain in the premium programs;
2. to explicitly recognize that external prices are not a requirement for relevant partners to enter or remain in preferred programs;
3. to confirm that relevant partners may enter/exit preferred programs whenever they wish to; and
4. to provide the relevant partners with its best estimates of the additional overnight stays and revenues obtained by joining the preferred programs.

With reference to the BSB discount, Booking.com committed to deleting any reference to the External Price Overview (“EPO”) as a relevant criterion for the application of the BSB with respect to all relevant partners. Therefore, as a consequence of such a commitment, the external pricing will not be considered as an input at any stage of the decision as to whether or when to apply BSB to relevant partners. Furthermore, Booking.com will also inform relevant partners, by means of dedicated reports, of the frequency with which the BSB is applied to their bookings, as well as the average size of the discount. This should enable hotels to assess whether and how to respond to the application of such a discount, given that monitoring the application of BSB would require excessive costs that are not feasible for SMEs, which represent the majority of Booking.com's relevant partners in Italy.

In the ICA's opinion, the commitments submitted by Booking.com eliminate the anticompetitive concerns raised during the investigation with regard to both the preferred programs and the BSB discount.

With the preferred programs commitments, Booking.com ensured that there will be no connection between the PPP(+) eligibility criteria and external prices, which was the main criterion behind the implementation of such programs, according to the ICA.

The BSB commitment also appeared worthy of acceptance for the ICA, as it once again established that external prices will not be considered as an input at any stage of the decision on whether or when to apply the BSB. 

Given the number of bookings to which the BSB was applied due to external prices being better than those on the Booking.com platform, the commitment prevents exposing hotels to significant reputational damage and discouraging them from differentiating their prices between online channels.

The commitments proposed by Booking.com will last 10 years and will be monitored by an independent Trustee for the first 5 years.

This is the second ICA investigation against Booking.com which has been closed with commitments. The first one, in 2015, also concerned the relationship between Booking.com and its commercial partners (hotels and OTA) and namely, the application of Most Favoured Nation (“MFN”) and tariff parity clauses, binding commercial partners not to offer their hotel services at better prices and conditions through other online booking agencies.

It is interesting to note that the first investigation was assessed under article 101 TFEU at a time when Booking.com was already considered the first operator in the market for online intermediation and reservation services for accommodation facilities. 10 years later, whilst the market has changed, the contested anti-competitive practices appear to be the same. 

The ICA's decision is available (in Italian only) at the following link: https://service.agcm.it/dotcmsdoc/allegati-news/A558%20e%20A558B_acc.%20imp.+chius.%20proc._omi.pdf. 

If you need more information or further guidance in this area, please contact Chiara Horgan, Federico Marini Balestra and Lucia Antonazzi.

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