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Hotel website accuses Booking and Expedia of breaching EU antitrust laws

(Bloomberg) – Online travel booking site Nustay A/S has filed a complaint with the European Union’s antitrust regulator, claiming that Expedia Group Inc. and Booking Holdings Inc. are trying to “kill” the startup for offering lower prices and punishing hotels that appear on its site.

The Danish company said online travel giants breach competition rules by trying to maintain “artificially high price levels” for hotel rooms – thus potentially trying to keep their commissions high – by preventing Nustay to offer lower prices.

Founded in 2014, Nustay offers rooms booked at a flat rate, as well as direct on-demand bookings, with the aim of providing customers with cheaper deals than often appear on competing sites. The Danish website also charges low commissions, which translates to better prices for customers but the same revenue for hotels, it says.

Nustay said Expedia and Booking.com downgrade hotels in their search rankings if a hotel’s prices are lower on a competing website, which hurts the hotels’ ability to get bookings. Hotels, in turn, are pressuring Nustay to raise prices so as not to lose more business on Booking and Expedia, he added.

The European Commission said it received Nustay’s complaint and is assessing it. Booking and Expedia did not respond to requests for comment.

“We really have the opportunity to offer a better product to consumers at a lower price, but we see a tremendous effort from Expedia and Booking.com to kill us before we even have a chance to gain a foothold” , said the general manager of Nustay. Officer Mathias Lundoe Nielsen said in an interview, adding that they decided to press charges to try to get a fair deal and “show how much of a problem it is”.

The company said its online visibility rose rapidly last fall when Alphabet Inc.’s Google began including Nustay’s cheaper deals in its hotel search, alongside deals from Booking and Expedia. .

The development also sparked complaints from more than a thousand hotels, which urged Nustay to raise prices, after coming under pressure from Expedia and Booking, Lundoe Nielsen said. Some of the hotels complained that they were losing so much business with Booking or Expedia, and since Nustay doesn’t account for much of their business, they just wanted Nustay to raise the price to appease the online travel giants, he said. -he declares.

In an email exchange between a European hotel and Nustay and seen by Bloomberg, the owner said “we have been contacted by our two partners Expedia and Booking.com, they have both asked us to contact those who are not not in line with the price we communicate.

Another hotel says “I’m being penalized by Booking.com and Expedia for selling rooms at my properties for less than they can,” according to another email exchange.

Expedia also directly urged Nustay to raise its prices in Google Search, before ending a partnership about three months ago with the company in which it sold inventory to Nustay, Lundoe Nielsen said.

A Europe-wide antitrust crackdown in recent years has seen Booking overturn some clauses requiring hotels to offer their best price to the site. European competition agencies flagged concerns about online bookings in a 2017 report. It said major hotel chains expected the biggest online travel sites to continue to grow, meaning that any new competitor would face “significant difficulties”.

Booking and Expedia have, in turn, urged the EU to probe how Google displays their sites in local and travel search results. EU antitrust chief Margrethe Vestager said she was looking at Google’s local search.

Online hotel booking sites are also being scrutinized by Japanese authorities. In the United States, Expedia is under investigation in Utah for allegedly conspiring with the largest US hotel chains to manipulate search advertising on Google.

(Updates with European Commission comment in fifth paragraph.)

–With help from Aoife White.

To contact the reporter on this story: Natalia Drozdiak in Brussels at [email protected]

To contact the editors responsible for this story: Giles Turner at [email protected]; Peter Chapman at [email protected]

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