EU Commission

Tour operators in the dark over hotel pricing investigation

TUI, Thomas Cook, DER Touristik and Kuoni are unclear why the European Commission is investigating their price agreements with Spanish hotel group Meliá.

February 09, 2017
The European Commission in Brussels
Photo: @imago/Winfried Rothermel

The European Commission’s headline-making investigation into allegations of possible price discrimination in the tourism industry has left the affected companies confused about the allegations.

The Commission announced last Thursday (February 2) that it has launched an official investigation “to assess if certain online sales practices prevent, in breach of EU antitrust rules, consumers from enjoying cross-border choice and being able to buy consumer electronics, video games and hotel accommodation at competitive prices”.

In the case of the tourism industry, the Commission said that “following complaints from customers” it is investigating agreements regarding hotel accommodation concluded between the largest European tour operators (Kuoni, REWE, Thomas Cook, TUI) and hotels (Meliá Hotels). It underlined that “hotels and tour operators cannot discriminate (against) customers on the basis of their location” as this would be against EU Internal Market regulations.

“The agreements in question may contain clauses that discriminate between customers, based on their nationality or country of residence. As a result, customers would not be able to see the full hotel availability or book hotel rooms at the best prices,” the EU’s competition authority stated.

“This may breach EU competition rules by preventing consumers from booking hotel accommodation at better conditions offered by tour operators in other Member States simply because of the consumer's nationality or place of residence. This would lead to the partitioning of the Single Market.”

Commenting on the three separate investigations into pricing for consumer electronics products, video games and hotel accommodation, Commissioner Margrethe Vestager, in charge of competition policy, said: "E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders. The three investigations we have opened today focus on practices where we suspect companies are trying to deny these benefits for consumers. More specifically, we are looking into whether these companies are breaking EU competition rules by unfairly restricting retail prices or by excluding customers from certain offers because of their nationality or location."

Under its Digital Single Market strategy, Brussels aims to break down barriers to cross-border e-commerce within the EU, especially so-called ‘geo-fencing’ which refers to offers being limited to certain geographical areas (such as countries) and blocked from other areas.

A European Commission spokeswoman told fvw: “The Commission will gather facts and see whether the initial suspicions are confirmed. If this is the case, then we will send the parties a letter of complaint.” However, she stressed: “There is no suspicion of a cartel.”

In response, the tour operators and the hotel group stressed they would cooperate fully with the Commission but questioned what exactly Brussels is concerned about.

One of the tourism companies told fvw: “We cannot make any comment because we have not received an official communication with allegations.” Another tour operator added: “We haven’t received any specific allegations that we could comment about.”

A spokeswoman for Meliá Hotels said: “The communication that we received does not prove that any rules were broken. The Commission has simply started a process to obtain more information.”

Moreover, while the Commission’s reference to Rewe clearly refers to its tourism business DER Touristik, it is also uncertain whether the reference to ‘Kuoni’ means the tour operator acquired by DER Touristik or the Swiss-based holding group with the same name.

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