Booking.com fined record €413 million in Spain for abuse of dominant position

Spain’s competition authority on Tuesday imposed a record fine of €413 million (CAD 620 million) on Dutch hotel booking platform Booking.com, accusing it of “abusing a dominant position” to the detriment of the hotel sector in Spain.

The fine, which the group immediately announced it would appeal, is the highest ever imposed in Spain for anti-competitive practices, a spokesman for the National Commission for Markets and Competition (CNMC) told AFP.

This comes as the tourist season is in full swing in Spain, the world’s second largest holiday destination after France.

In a press release, the CNMC justified its decision with the commercial policy it considers “unfair” of Booking, which “abused its dominant position” by imposing “a certain number of conditions” considered unfair to the Spanish hotels listed on its platform.

The competition watchdog noted a ‘price clause’ that prohibits hotels from offering their rooms on their own sites at a lower price than Booking’s and the fact that the platform ‘reserves the right to unilaterally reduce the price’ of the rooms.

He also points to the Dutch giant’s ‘lack of transparency’ towards partner hotels, which prevents them from ‘making informed decisions’ about their participation in the platform’s preferential programs, such as ‘Preferente Plus and Genius’.

Finally, the CNMC highlights the criteria that Booking uses in the standard reference of the hotels it collaborates with. Here, the hotels that have made a large number of reservations through Booking.com are listed first.

“This encourages hotels to make their reservations online only through Booking.com”, which prevents full “competition from other travel agencies”, the CNMC judges, which indicates that it has imposed a “certain number of obligations” on Booking to ensure that these practices “are not continued in the future”.

“Lack of consistency”

In a response to AFP, Booking assured that it “strongly disagreed with the conclusion of the investigation” by the CNMC, which was launched following a complaint by the Spanish Association of Hotel Managers (AEDH). It also announced that it planned to “appeal against this unprecedented decision.”

“Booking.com operates in a highly competitive sector and an industry characterised by a wide choice for both businesses and consumers,” but “the decision taken today does not take this choice into account,” the group continued, denouncing a “lack of coherence”.

The Dutch platform itself had announced the opening of this investigation in February, two weeks before the European Digital Markets Act (DMA) came into effect, and indicated at the time that it risked a fine of $530 million.

At the time, Booking doubted whether the imposition of this fine by the CNMC was justified, given the DMA rules that apply at European level.

“We are confident that the European Union Digital Market Act represents the relevant framework to discuss and address the CNMC’s key concerns, and provides an opportunity to agree on solutions that apply across Europe rather than country by country,” the Dutch group stressed on Tuesday.

The DMA, which came into force on 7 March, imposed a new series of obligations and prohibitions on digital companies in order to increase competition in this sector. It has been the subject of an intense standoff between the European Commission and the companies involved, some of which have lodged an appeal.

The DMA applies to groups operating in at least three European countries, having a market capitalisation of more than €75 billion or a turnover of more than €7.5 billion in Europe and having at least 45 million active end users and 10,000 business users in Europe.

In addition to Booking, several digital giants are now being forced to apply these new rules, such as Alphabet, Amazon, Apple, Meta, Microsoft and the social network TikTok, owned by the Chinese group ByteDance.

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