Johannesburg – Booking.com (Pty) Ltd (Booking.com) has made an undertaking to comply with the Competition Commission’s (Commission) recommended remedial actions regarding its online accommodation booking platform.
“The Competition Commission (Commission) and Booking.com (Pty) Ltd (Booking.com) have agreed on steps to be taken by the online accommodation booking platform to comply with the Commission’s recommended remedial actions as contained in the final report of the Online Intermediation Platforms Market Inquiry (OIPMI),” said Commission spokesperson Siyabulela Makunga.
“These settlement terms conclude Booking.com’s ongoing review and appeal litigation challenging the OIPMI remedial actions in both the High Court of South Africa and at the Competition Tribunal.
“The Commission welcomes Booking.com’s undertaking to fulfil the remedial actions as agreed, including removing the wide and narrow price parity terms from all contracts with accommodation providers in South Africa, and from any criterion for participation in Booking.com’s incentive programmes (Genius, Preferred Partner or Preferred Plus) or any other membership programmes.”
The matter goes as far back as 19 May 2021, when the Commission initiated the OPIMI to assess whether features in Business-2-Consumer (B2C) online platform markets adversely affected competition between platforms and between businesses using these platforms, including small to medium enterprises and HDPs in terms of section 43B(1)(a) of the Competition Act No 89 of 1998 (as amended).
“The B2C platforms included eCommerce, online travel agencies, food delivery, app stores, and property/automotive classifieds, along with the role of Google Search in shaping B2C platform competition,” said Makunga.
“These types of platforms were selected as they affect a wide range of business activities throughout the country’s economy.”
On 30 July 2023, the Commission published its Final OIPMI Report, which was the culmination of almost two years of investigations into local and international B2C online platform markets.
The final report identified features that adversely affected competition in these markets.
It includes a set of remedial actions that platforms, and some businesses, were required to implement to remedy the identified market features that adversely affect competition.
Makunga said the anomaly was the wide price parity clause that requires accommodation providers on Booking.com to publish or offer prices no higher than any other online travel intermediation platforms.
“A narrow price parity clause requires accommodation providers listing on Booking.com to publish or offer prices that are no higher than their own direct online booking channel i.e. own website,” explained Makunga.
“Removing both these clauses effectively enhances price competition between online travel agents and allows accommodation providers such as hotels and guesthouses to price lower on their own websites for online bookings.
“These changes will also benefit consumers by providing lower price options online and will allow accommodation providers to innovate and develop their direct sales channels.”
Makunga said, in addition, Booking.com will put in place a substantial programme to provide funding for initiatives to identify, onboard, promote, and grow accommodation establishments, activities, and experiences provided by small to medium enterprises that are owned by historically disadvantaged persons (HDPs) or HDP communities.
“The Commission is pleased with the positive outcome of the extensive consultations with Booking.com and the amicable, collaborative engagements with the platform and its representatives,” Makunga said.
“The Commission is hopeful that the agreed-upon terms will encourage the four other firms that have brought appeals against the OIPMI remedial actions to settle with the Commission.”
