Competition Authority Imposes a Record Fine on Booking.com

Booking.com failed to comply with its obligations in relation to the previous infringements, and the Hungarian Competition Authority (GVH) imposed a record fine on the company. The GVH found that the global online accommodation booking platform was s

By: hungarytoday.hu

Jul 16 2024
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Competition Authority Imposes

The GVH launched competition proceedings against Booking.com back in 2018. During the investigations, the Competition Authority revealed that

the company emphasized the “free cancellation option” for accommodations, but consumers had limited access to many accommodations and paid higher prices than for the same accommodation without the “free cancellation option.”
The information provided was of an urgent nature, generally giving the impression to consumers that the accommodation they were looking for was very popular, and had limited availability. This is considered as a form of psychological pressure.
In addition, the company did not act with professional diligence in presenting the possibilities of the SZÉP card (popular fringe benefit in Hungary) payment option.

In April 2020, the GVH fined Booking.com HUF 2.5 billion (EUR 6.39 million) and banned it from continuing these infringing practices.

Booking.com headquarters in the Netherlands. Photo: Wikipedia

Since then, the Competition Authority has continued to monitor whether the company will cease its infringing activities. Follow-up investigations revealed that Booking.com had reduced the number of urgent messages, but that it continued to use them until February 26, 2024. In addition, the company did not stop advertising the “free cancellation option.”

“Finally, in the last stage of the procedure, the company modified its contested commercial practices in order to comply with the GVH’s requirements and to protect consumers’ legitimate interests. This included the reintroduction of cheaper accommodation offers for Hungarian consumers that could not be cancelled without losing the deposit,” the Authority wrote.

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On top of the fines imposed so far, the Competition Authority has fined Booking.com HUF 382.5 million (EUR 976,469).

The Hungarian Competition Authority has recently been paying particular attention to the online accommodation services market. In the summer of 2023, the GVH launched an accelerated sector inquiry into the industry following a number of market signals received by the Competition Authority, in particular regarding the practices of Booking.com, the largest international accommodation provider. The GVH made a number of recommendations in the final report of the accelerated sector inquiry, including the need to phase out the price parity clauses, which was finally implemented and Booking.com abolished these clauses as of July 1, 2024.

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