The report from the House of Lords Select Committee – Online Platforms and the Digital Single Market – is a response to the EU Commission consultation on how the largest online platforms use their market power and whether current regulation and competition law is effective in the digital economy.
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The report recommends:
- Critical scrutiny by competition authorities of parity clauses and recommends that the CMA urgently order a market investigation into the online travel sector;
- A speedier process for resolving competition law questions, proposing interim measures be used to stop anti – competitive practices, time limits be applied to negotiations and the development of sector based codes of practice;
- Recommends the European Commission amend the Unfair Consumer Practices Directive so that platforms are required to provide the criteria on which they provide ratings and search results and their policies for handling negative reviews, as well as clearly distinguishing between user reviews and paid promotions.
The BHA welcomed the report and has called for an ‘immediate inquiry’ by the Competitions and Markets Authority (CMA) into OTAs.
The trade association has called for an outright ban on rate parity clauses, which prevent hotels from offering lower rates than those on the online booking sites where they are listed. Rate parity clauses are already illegal in France.
It also called for more effective and faster methods for resolving competition and consumer protection issues, and for transparency in ranking, ratings and reviews.
The BHA said the next step is for the CMA to adopt the report’s recommendations to make sure that the travel and hospitality sector is a “truly competitive marketplace, which is, after all, in the best interests of the consumer”.
Ufi Ibrahim, chief executive at the BHA, welcomed the report and said OTAs wield “vast power” and hold the hospitality industry “hostage” by commanding “punitive” rates of commission.
She added: “We are pleased that this influential committee is proposing Europe wide steps to enable our industry to challenge anti-competitive online practices when they arise.
“The BHA calls upon on the government and policy makers in the European Commission to support our lobbying in this area and get engaged – this is a significant step forward for our industry and we want to see the momentum continue.”