Booking.com, the online travel agency, has been fined €413.24 million by Spain’s competition authority, the CNMC, for abusing its dominant market position over the past five years. The investigation was initiated following complaints from the Spanish Association of Hotel Managers and the Regional Hotel Association of Madrid. The CNMC found that Booking.com imposed unfair terms and conditions on hotels, making it difficult for rival travel agencies to compete.
During the period under investigation, Booking.com held a market share of between 70% and 90% in Spain for online booking intermediation services. The CNMC stated that the company committed two abuses of its dominant position by imposing unfair commercial conditions on hotels and restricting competition from other online travel agencies.
One of the unfair practices identified by the authority was Booking.com’s imposition of an unfair price clause on hotels. This clause prevented hotels from offering their rooms on their own websites for a lower price than what was offered on Booking.com. However, the platform reserved the right to unilaterally reduce the price hotels offer through its website or application. This practice created an imbalance in the market and disadvantaged other online travel agencies.
The CNMC also criticized Booking.com for issues related to its general terms. The authority found that only the English version of the terms had legal value, while the law applicable to the terms and the competent courts were based in the Netherlands, where Booking.com is headquartered. This made it more expensive and challenging for Spanish entities to take legal action against Booking.com in the event of a dispute.
Another concern raised by the investigation was the lack of transparency regarding the value Booking.com provided to hotels through its subscription products. These products allowed hotels to improve their position in the platform’s default rankings in exchange for higher commission fees or offering discounted rates on some rooms. The CNMC found that hotels were not adequately informed about the benefits and costs associated with these subscription programs, leading to an unfair advantage for Booking.com.
The authority also highlighted Booking.com’s use of the total number of reservations for a hotel through its platform as a ranking criterion in default search results lists. This practice encouraged hotels to focus their online bookings on Booking.com, limiting competition from other online travel agencies.
As a result of the investigation, the CNMC imposed a fine of €413.24 million on Booking.com, with two penalties of €206.62 million each for the unfair terms and conditions imposed on hotels and the restriction of competition from other online travel agencies. The authority has also imposed behavioral obligations on Booking.com, requiring the company to cease the infringing conduct and prevent similar practices in the future.
Booking.com has the option to appeal the sanction before the National Court within two months. However, the travel giant is not only facing consequences in Spain but also across the European Union. It has been designated as a gatekeeper under the EU’s Digital Markets Act, which means it will face tighter regulation in the coming months. Booking.com must ensure compliance with this regime by mid-November, with potential penalties for non-compliance reaching up to 10% of its global annual turnover or 20% for repeat offenses. This indicates a broader trend of increased scrutiny and accountability for dominant online platforms in the EU.
