The OFT has recently accused several travel websites including the popular sites, Booking.com and Expedia of price-fixing. An investigation is currently taking place which is looking at various anti-competitive behaviours which has been engaged in by Intercontinental Hotels, the largest hotel group in the world.
This hotel company own such popular brands as Crowne Plaza and Holiday Inn. As part of their organisation they also own the two popular travel sites mentioned above. The OFT has stated that three large companies are working together with their rivals in order to increase the price of hotel rooms artificially.
The regulatory body has said that some online travel companies are working to get rid of the sale of cheap hotel rooms by setting up false minimum prices so rivals are unable to undercut the main companies on price.
It has been suggested that small companies which refuse to take part in the price manipulation are being bullied by larger companies until they do. Some hotel companies that refuse to be part of the price-fixing have said that they have been removed from some popular travel websites making it very difficult for rooms to be booked effectively.
Expedia has come under particular scrutiny and the OFT stated that they have been involved in cartel like behaviour which is a clear breach of the law. The accusations of this behaviour stated the practice was going on between 2007 and 2010.
Expedia have said that they are going to be pleading guilty to the offences in order to avoid very large fines. Furthermore, it is expected that the OFT are going to be lenient because they have helped blow the whistle on other companies involved in the practice. Competition law states that the OFT has the power to fine the company’s 10 percent of their global turnover.