Swiss price watchdog has reservations about Booking.com

The Swiss price watchdog has initiated proceedings against Booking.com, the online travel fare aggregator, after finding signs of “price abuse” concerning commissions that hoteliers have to pay in Switzerland.

Stefan Meierhans, the federal price watchdog, said on Tuesday that attempts to reach an amicable solution had failed since Booking.com had “no interest in holding talks”. He said he had therefore been left no choice than to instigate proceedings.

Meierhans, who would not go into detail, began investigating Booking.com in February, looking into whether it was a market-leading company, how much hoteliers had to pay to appear on the site, where the hotel would be listed, and how much commission that would cost.

He told the Swiss News Agency on Tuesday that the prices paid by consumers had not been questioned, “even though the commission paid by hoteliers would necessarily have a ripple effect on the final price”.

Meierhans could order new commission fees to be set if Booking.com doesn’t join the negotiating table, although this could be appealed at the federal administrative court.

Growing market

Booking.com and other online reservation platforms are no strangers to the Swiss legal system. In October 2015, the Federal Competition Commission banned them from demanding fees solely from hoteliers and from imposing other illegal contractual obligations, for example setting lower prices or offering a higher number of rooms than other sales channels.

Such online platforms play an increasing role in Switzerland: last year the number of bookings made through them rose by 6.7 percentage points to 27%, according to the Institute for Tourism and the HES-SO Valais-Wallis.

Three sites – Booking.com, Expedia and HRS – are responsible for 93% of bookings in Switzerland, with total turnover of an estimated CHF1 billion ($1.04 billion). Booking.com has the lion’s share.