FAS RUSSIA ISSUES SECOND WARNING TO BOOKING.COM

This includes the abolition of parity in all channels of sales of hotel services

On September 18, 2020, the FAS Russia issued Booking.com B.V. LLC (hereinafter referred to as Booking.com) a second warning on termination of actions containing signs of violation of the antimonopoly legislation [1]. The case against the company was initiated on the basis of a claim by the All-Russian public organization of small and medium-sized enterprises "OPORA RUSSIA". The aggregator imposed conditions on hotels, hostels and other accommodation facilities on the need for mandatory provision and compliance with price parity, room availability and conditions in all sales (distribution) channels of hotel services contained in agreements concluded between the company and hotels.

For example, if a hotel entered into an agreement with Booking.com to publish information about the provision of its services under certain conditions, it was deprived of the opportunity to offer more favorable conditions on its website or information desk. Moreover, the restriction concerned both prices for accommodation and availability, as well as types of rooms.

The agency concluded that thus, Booking.com, which occupies a dominant position in the market for the provision of services for aggregators of information about hotels and other accommodation facilities, imposed deliberately unfavorable terms of the contract. Because of this, hotels were unable to set prices for their services in various sales channels lower than on Booking.com. As the FAS Russia concluded, this could lead to infringement of the interests of hotels, as well as to limit and eliminate competition in the market for the provision of services by aggregators of information about them.

"In the long term, the implementation of the warning and the abolition of parity should have a positive effect not only on hotels, but also on consumers of hotel services, as well as on other aggregators who have recently entered this market or are just about to do so," said Deputy Head of the FAS Russia Alexey Dotsenko.

The warning must be complied with within a month - until October 18. Failure to comply with the warning of the FAS Russia entails the initiation of a case on violation of antimonopoly legislation.

[1] Paragraph 3 of Part 1 of Article 10 of the Federal Law of 26.07.2006 No. 135-FZ "On Protection of Competition"

The text of the warning can be found here.

For reference:

The case No. 11/01/10-41/2019 against Booking.com was initiated due to the company's failure to comply with the warning dated November 12, 2019. The FAS Russia issued this warning based on the results of consideration of the claim of the All-Russian public organization of small and medium-sized businesses "OPORA RUSSIA". Then the violation of the antimonopoly legislation by Booking.com was expressed in the imposition of the terms of the agreement on the need to provide and comply with the parity of prices and rooms, as well as the conditions for interaction with closed user groups on the territory of the Russian Federation.

According to paragraph 3 of part 1 of Article 10 of the Law on the Protection of Competition, the actions (inaction) of a dominant economic entity are prohibited, the result of which is or may be the prevention, restriction, elimination of competition and (or) infringement of the interests of other persons (business entities) in the field of entrepreneurial activity or an indefinite range of consumers, including the imposition of contract terms to the counterparty that are unfavorable for him or not related to the subject of the contract (economically or technologically unjustified and (or) not directly provided for by federal laws, regulatory legal acts of the President of the Russian Federation, regulatory legal acts of the Government of the Russian Federation, regulatory legal acts of authorized federal executive bodies or judicial acts of the requirement for the transfer of financial resources, other property, including property rights, as well as consent to conclude an agreement subject to the introduction of provisions regarding the goods in which the counterparty is not interested, and other requirements).

According to part 3 of article 39.1 of the Law on the Protection of Competition, a warning about the termination of actions (inaction), which contain signs of violation of the antimonopoly legislation, is issued by the antimonopoly body in case of revealing signs of violation during the consideration of the case on violation of the antimonopoly legislation, including paragraph 3 of part 1 of article 10 of the Law on Protection of Competition.