Spain’s competition watchdog on Tuesday imposed a record fine of 413 million euros ($620 million CAD) on Dutch hotel booking platform Booking.com, accused of “abusing a dominant position” to the detriment of the hotel sector in Spain.
This fine, which the group immediately announced it would appeal, is the largest ever imposed in Spain for anti-competitive practices, a spokesperson for the National Commission for Markets and Competition (CNMC) told AFP.
It comes as the tourist season is in full swing in Spain, the second largest destination in the world after France.
In a press release, the CNMC justified its decision by the commercial policy it considers “unfair” of Booking, which “abused its dominant position” by imposing “a certain number of conditions” deemed unfair on the Spanish hotels listed on its platform.
The competition watchdog thus notes “a price clause” prohibiting hotels from offering their rooms on their own sites at a lower rate than that of Booking and the fact that the platform “reserves the right to lower” unilaterally “the price” of the rooms.
He also points out the Dutch giant’s “lack of transparency” towards partner hotel establishments, which prevents them “from making informed decisions” regarding their participation in the platform’s preferential programs, such as “Preferente Plus and Genius.”
The CNMC finally highlights the criteria used by Booking in its default referencing of the hotels with which it works, consisting of showing first the establishments which have made a large number of reservations through it.
“This encourages hotels to make their reservations online only via Booking.com”, which prevents full “competition from other travel agencies”, judges the CNMC, which specifies that it has imposed on Booking a “certain number of obligations” to guarantee that these practices “do not continue” “in the future”.
“Lack of consistency”
In a reaction sent to AFP, Booking assured that it was “in profound disagreement with the conclusion of the investigation” by the CNMC, launched after a complaint from the Spanish Association of Hotel Managers (AEDH). It also announced that it intended to “appeal this unprecedented decision.”
“Booking.com operates in a highly competitive sector and an industry characterised by a wide choice for businesses and consumers alike”, but “the decision handed down today does not take this choice into account”, the group continued, denouncing a “lack of coherence”.
The Dutch platform itself had announced the opening of this investigation in February, two weeks before the entry into force of the European law on digital markets (DMA). It had then indicated that it risked a fine of 530 million dollars.
Booking had at the time questioned the legitimacy of the CNMC in imposing this fine, in light of the DMA rules, which apply at European level.
“We are convinced that the European Union’s Digital Market Act represents the relevant framework to discuss and address the main concerns expressed by the CNMC, constituting an opportunity to agree on solutions applicable to the whole of Europe rather than country by country,” the Dutch group insisted on Tuesday.
The DMA, which came into force on 7 March, imposed a new series of obligations and prohibitions on digital companies in order to increase competition in this sector. It is the subject of an intense standoff between the European Commission and the companies concerned, some of which have filed appeals.
The DMA applies to groups available in at least three European countries, which exceed €75 billion in market capitalisation or €7.5 billion in sales in Europe, and have at least 45 million active end users and 10,000 enterprise users in Europe.
In addition to Booking, several digital giants are now forced to apply these new rules, such as Alphabet, Amazon, Apple, Meta, Microsoft and the social network TikTok, owned by the Chinese group ByteDance.