A settlement has been reached between the Competition Commission and online accommodation reservation service Booking.com regarding pricing parities.
Booking.com has agreed to change its pricing rules in the country, especially for hotels and guest houses.
Commission spokesperson Siyabulela Makunga said that the settlement terms conclude Booking.com’s ongoing review and appeal litigation challenging Online Intermediation Platforms Market Inquiry (OIPMI) remedial actions in both the high court of South Africa and at the Competition Tribunal.
Corrective measures
The commission and Booking.com have come to an agreement regarding the actions that Booking.com should take to comply with the commission’s suggested corrective measures as stated in the OIPMI’s final report.
“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, such as Genius, Preferred Partner, Preferred Plus, or any other membership programmes.
“A wide price parity clause is a contractual clause that requires accommodation providers on Booking.com to publish or offer prices that are no higher than any other online travel intermediary platforms.
“A narrow price parity clause requires accommodation providers listed on Booking.com to publish or offer prices that are no higher than their own direct online booking channel, i.e., their own website,” said Makunga.
Price competition
He also stated that the removal of both of these clauses would effectively enhance price competition between online travel agents and allow 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.
“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,” he said.
