Out-Law / Your Daily Need-To-Know

Hotel booking sites to address consumer law concerns

Out-Law News | 07 Feb 2019 | 1:54 pm | 1 min. read

Some of the most popular websites used by UK consumers for booking holidays have agreed to update some of their hotel booking practices after concerns were raised by a UK regulator.

The Competition and Markets Authority (CMA) announced on Wednesday that it had secured undertakings from Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago that will bind the companies to a series of principles relevant to hotel bookings.

According to the CMA, each of the six websites have agreed to make it clearer how hotels are ranking in search results, including by explaining how the results have been impacted by the amount of commission a hotel pays them.

They have also pledged not to give a false impression of the availability or popularity of a hotel or to rush customers into making a booking decision based on incomplete information, and agreed to be clearer about discounts and promotional offers.

The CMA also said that the websites agreed to take action to address so-called 'hidden charges'. As part of their commitments, the companies will be required to display "compulsory charges such as taxes, booking or resort fees in the headline price".

The changes need to be implemented by 1 September this year. The CMA said it will monitor compliance with the commitments. It said the six companies have already begun to make improvements.

The regulator also outlined its intention to set out its "clear expectations" around compliance with consumer protection law to other hotel booking sites. Those businesses will also have until 1 September to "make necessary changes", it said.

Angelique Bret, a specialist in consumer law and its enforcement at Pinsent Masons, the law firm behind Out-Law.com, said: "The CMA is increasingly using its powers under Part 8 of the Enterprise Act 2002 to investigate companies, particularly in the online sector, for suspected breaches of the consumer protection rules, with the aim of securing binding undertakings from these companies to make wide-raging changes to their terms and business practices. These undertakings are published on the CMA’s website."

"The CMA has taken such enforcement action most recently in respect of online gambling, care homes and secondary ticketing websites and, following the loyalty penalty super complaint, the supply of anti-virus software," she said.

"If companies are not prepared to agree to make the changes to their business practices which the CMA considers are necessary, the CMA can apply to the courts for an enforcement order. The increased activity of the CMA in using its consumer protection powers reflects an over-riding concern to protect vulnerable consumers and, more generally, an increase in regulatory scrutiny and intervention in the context of business-to-consumer businesses. We expect this trend to continue provided that the CMA continues to have the necessary resources, post-Brexit," Bret said.