Accommodation providers in South Africa can breathe easier after internet travel giant Booking.com agreed to change its pricing structure in South Africa after it settled with the Competition Commission.
Booking.com has agreed to remove the wide and narrow price parity terms from all contracts with accommodation providers in South Africa and from any criterion for participation in Booking.com’s incentive programmes – Genius, Preferred Partner or Preferred Plus – or any other membership programmes.
The Commission explained that a wide price parity clause is a contractual clause, which requires accommodation providers on Booking.com to publish or offer prices that are no higher than any other online travel intermediation platforms.
A narrow price parity clause requires accommodation providers listing on Booking.com to publish or offer prices that are no higher than their own direct online booking channel, such as its own website.
“Removing both these clauses effectively enhances price competition between online travel agents and allows accommodation providers such as hotels and guest houses to price lower on their own websites for online bookings. These changes will also benefit consumers by providing lower price options online and will allow accommodation providers to innovate and develop their direct sales channels,” it said.
The Commission said on Monday they had reached a settlement on steps to be taken by the online accommodation booking platform to comply with the Commission’s recommended remedial actions as contained in the final report of the Online Intermediation Platforms Market Inquiry (OIPMI).
On May 19, 2021, the Commission initiated the OIPMI to assess whether features in Business-2-Consumer (B2C) online platform markets adversely affected competition between platforms and between businesses using these platforms, including small to medium enterprises and historically disadvantaged persons (HDPs).
“These settlement terms conclude Booking.com’s ongoing review and appeal litigation challenging the OIPMI remedial actions in both the High Court of South Africa and at the Competition Tribunal,” it said.
In addition, Booking.com will put in place a substantial programme to provide funding of initiatives to identify, onboard, promote, and grow accommodation establishments, activities and experiences provided by small to medium enterprises that are owned by HDPs or HDP communities.
The Commission said it was hopeful that the agreed-upon terms would encourage the four other firms that had brought appeals against the OIPMI remedial actions to settle with the Commission.
“The remedial actions are intended to provide the following benefits to platforms, businesses, and consumers: greater visibility and opportunity for smaller South African platforms; enable more intense platform competition; level the playing field for small businesses selling through these platforms; and provide a more inclusive digital economy,” the Commission said.
BUSINESS REPORT