The Comisión Nacional de los Mercados y la Competencia (CNMC), Spain’s independent competition regulator, has delivered a landmark decision against Booking.com, accusing the online travel agency (OTA) of abusing its dominant market position over the past five years. The CNMC’s ruling, issued Tuesday, imposes a staggering €413.24 million in fines on the company and introduces several behavioral mandates aimed at curbing its anti-competitive practices.
The regulator’s decision centers on two key allegations: Booking.com has allegedly imposed unfair commercial conditions on Spanish hotels using its booking services and restricted competition from other online travel agencies. The CNMC highlighted that Booking.com has controlled between 70% to 90% of the Spanish hotel market since 2019, which the agency asserts has allowed the OTA to leverage its dominance to engage in anti-competitive behavior.
Specific practices under scrutiny include:
- Unfair Pricing Clauses: Booking.com has been accused of enforcing a price clause that prevents hotels from offering their rooms at lower rates on their own websites than those listed on Booking.com. Additionally, Booking.com retains the unilateral right to lower the prices offered by hotels on its platform.
- Lack of Transparency: The regulator criticized Booking.com for its opaque practices surrounding its Preferred, Preferred Plus, and Genius programs. These programs, which allow hotels to improve their ranking on Booking.com’s search results in exchange for higher commissions or discounts on their rooms, were found to lack clear, transparent information for potential subscribers.
- Market Dominance: The CNMC found that Booking.com’s practice of using the total number of reservations a hotel makes through its platform as a ranking criterion on its search results page effectively encourages hotels to funnel all their bookings through Booking.com, stifling competition from other online travel agencies.
The investigation into Booking.com was prompted by complaints from the Spanish Association of Hotel Managers and the Madrid Hotel Business Association in 2021. The CNMC initiated a sanctioning procedure in October 2022, which culminated in this week’s decision confirming the anti-competitive practices.
In addition to the substantial financial penalty, the CNMC has imposed several behavioral obligations on Booking.com to prevent future violations. These include changes to its pricing and ranking mechanisms to foster a more competitive market environment. Booking.com has been granted a two-month period to file an administrative appeal against the decision.