CNMC proposes to impose 486 million sanctions on Booking for abuse of dominant position

National Commission for Markets and Competition (CNMC) proposed to introduce sanctions $530 million (486 million euros) for a travel company Booking. This was acknowledged by the vacation rental platform in a results presentation it sent early this Thursday morning to the SEC, the US markets regulator. If this punishment is confirmed, This will be the largest fine imposed by the Spanish organization in its history..

“The company recorded losses in the amount of $530 million at the end of 2023 related to the preliminary decision of the Spanish competition authority,” says the first paragraphs of the information provided to the company by the tourism metasearch engine. presentation of annual results.

From booking reject this sanctionunprecedented in Spain, and they say they will appeal if the fine is finally enforced.

Since October 2022, Spain’s National Commission for Markets and Competition (CNMC) has been investigating the actions of an online travel company following a complaint filed hotel associations.

The Spanish competition authority wants to find out whether there was a series of actions that constituted abuse of dominant position from Booking. The regulator has confirmed that the file is currently under investigation and that its contents confidential.

Possible abuse of dominant position

The conduct under investigation relates to a range of actions that may constitute an abuse of a dominant position by Booking. regarding intermediary services offered by various online travel agencies to hotels, which is justified by the regulator.

In particular, this practice will consist of possible imposing “unfair conditions” on hotels located in Spain, and the implementation trade policy what they could have “elimination effects” in other online travel agencies, as well as in other online sales channels.

On the other hand, the behavior under study will also include practices that use dependency situation efficiency of hotels located in Spain in relation to Booking. This fact will constitute an “act unfair competition this could distort free competition, affecting public interests,” the CNMC said.

The initiation of the case in October 2022 did not prejudge the final outcome of the investigation, and a maximum period of 18 months was opened for the CNMC to investigate the case and resolve it. That’s why, The resolution must be ready by April next year.. The company did not want to confirm the exact expected date for resolution of the case.

“Active” cooperation and challenging sanctions

The company assures that although “actively and constructively cooperated with the investigation”claims to be “disappointed” with the proposed CNMC resolution and “I completely disagree with their conclusions”.

Also remember that they will provide notice of Digital Markets Act EU, whose goal is provide “harmonized standards” for online platforms across the EU and avoid fragmentation at national level.

“We believe that the DMA is the appropriate forum to discuss and evaluate the main issues raised by the CNMC because allows for harmonized solutions that apply across Europe rather than country by country. We also intend to appeal this unprecedented decision in Spain if it becomes final,” the company confirms.

The company attributes the $530 million in losses recorded in fiscal year 2023 to this “preliminary decision of the Spanish antitrust authority,” according to a filing with the SEC. That is, he would reserve this amount in case this historical sanction is finally carried out.

Complaint from hoteliers

The conflict began in 2021 with two complaints received by the CNMC from the Spanish Association of Hotel Directors and the Madrid Hotel Association regarding the abuse of a dominant position in the market by introduce a so-called “parity clause” for hoteliers.

Hoteliers assured that the Booking point prevented them from tailoring their offerings to specific or current market circumstances.. This measure requires a hotel to apply the same rates and conditions for a specific room type as those advertised through Booking, regardless of distribution channel.

Reservation justifies these parity provisions in “ensure that rates and terms published on the platform are competitiveso that customers can benefit from lower search costs, while also preventing the property from taking advantage of Booking.com’s large investment.”