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Italy’s antitrust regulator has opened an investigation into Booking Holdings (NASDAQ:BKNG) for abusing its dominate position in the online travel industry by colluding with hotels in the Preferred Partner Program.
The Italian Competition Authority claims Booking (BKNG) receives higher commission fees from hotels in its Preferred Partner Program in exchange for higher visibility on the website. The hotels also agree to offer competitive prices on Booking's (BKNG) website, specifically, prices not higher than those offered by hotels on their own websites or on any other online travel agency. If Booking (BKNG) finds that a hotel is offering a better price on a competing website, the company reserves the right to offer a “discount” without the consent of its hotel partners.
This “Booking Sponsored Benefit” is utilized by the company to align prices on its platform to the best online offer available.
Italy’s regulator contends that this is aimed at “reducing the freedom of Italian hotels in setting prices for the online sales channel…and will likely results in exclusionary effects in the market for online hotel intermediation and booking services.”
On Thursday, the office of the Italian Competition Authority with assistance from the Special Antitrust Unit of the Italian Financial Police carried out inspections of Booking (BKNG) offices in Italy.
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