The National Markets and Competition Commission (CNMC) has proposed a fine of 486 million euros, about 530 million dollars, to the travel and accommodation platform Booking for abuse of a dominant position. This was recognized by the company in the presentation of its results this Thursday at the last minute. If the punishment is confirmed, something that would be known in July, it would be the largest fine imposed by the Spanish organization in its entire history. The company will appeal if this is the case.
The origin of the story forces us to go back to October 2022, when the CNMC began an investigation into the activity of the portal that dominates online hotel reservations, following two complaints from the Spanish Association of Hotel Directors and the Hotel Business Association. from Madrid. It sought to define whether it had committed “anti-competitive practices” that affect hotels and other online travel companies.
The Spanish authority was investigating practices “that could involve an abuse of Booking’s dominant position with respect to intermediation services,” it reported at the time. Specifically, the imposition of “unfair conditions” on hotels in Spain, “commercial policies that could have had exclusionary effects on other online travel agencies” and “practices that would exploit the situation of economic dependence that hotels would have on to Booking”. The latter could represent an act of unfair competition that distorts free competition.
More than a year later, this January Competition notified Booking of its preliminary decision and the imposition of the fine, as well as the restriction of certain practices that determine how hotels are classified when presented to clients.
The company has provisioned the amount in case this historic sanction is finally carried out. “The company has recorded losses of $530 million in 2023 results related to a preliminary decision by the Spanish competition authority,” he says in the information provided to the SEC, the regulator of US markets, when presenting the accounts this Thursday.
To set the sanction, Booking’s income history has been taken into account. In its documents, the portal says that the final decision is expected to arrive in July, at which time “it is possible that the final fine will be increased.” The company, which has had to use experts in Spanish competition law, assures that it will appeal the decision if it goes ahead. “We do not agree with the justification set forth in the preliminary decision and certain restrictions.” The group maintains collaboration with the authorities until the matter is resolved.
It is not the only front that is open. In 2017, the Swiss authorities opened an investigation into the commissions it charges in the country, pending resolution. In 2023, Poland opened another investigation into the identification of hosts. In both cases you face sanctions and limitations on activity, he warns. Likewise, it is or has been dealing with investigations with the British and EU competition authorities and with the French and Italian treasury for the payment of arrears of taxes.
Also late last year the European Commission blocked Booking’s bid to buy eTraveli, a smaller online travel agency, citing concerns about competition and fears that approval would lead to higher costs for consumers.
