Else Beekman
The National Commission on Markets and Competition (CNMC) has imposed a record fine of €413 million on Booking.com for abuse of dominant position. It is the largest penalty ever issued by the CNMC.
Since at least 1 January 2019, Booking.com has been engaging in two continuous abuses of the Competition Law. Herewith, prompting the CNMC to take unprecedented action against the hotel booking giant. Booking.com holds a market share in Spain ranging between 70% and 90%, underscoring its dominant position.
In 2021, the Spanish Association of Hotel Directors and the Madrid Hotel Business Association filed complaints against Booking.com for its abusive practices. The CNMC initiated the sanctioning process in October 2022, which has now culminated in this substantial fine.
Abusive practices
The first abuse relates to Booking.com’s exploitative dominance. The company enforced a pricing clause that “prevented hotels from offering lower prices on their own websites.” Additionally, the company reserved the “right to unilaterally reduce prices,” undermining fair competition. The CNMC also cited a lack of transparency in Booking.com’s Preferential, Preferential Plus, and Genius programs, which purportedly enhanced hotel positioning.
Reservation control
The second abuse pertains to exclusionary dominance. Booking.com hindered other agencies from competing on equal terms by favouring certain hotels based on the total number of reservations. The more bookings a hotel had on Booking.com, the better its positioning, incentivising hotels to focus their efforts on a single platform.
Furthermore, any disputes regarding Booking.com’s General Terms and Conditions had to be resolved through the Dutch legal system as the company is Dutch. Adding extra costs and complications for hotels.
Record fine
The CNMC has imposed two fines of €206.6 million each on Booking.com, totalling €413.24 million, an unprecedented figure. Initially, in February 2024, Booking.com was warned it might face penalties amounting to €486 million, which has since been adjusted.
Booking.com to appeal
Booking.com plans to appeal the decision before the National Court. In an official statement to Xataka, The company confirmed its intention to challenge the CNMC’s resolution. The company argued that the EU’s Digital Markets Act (DMA) is the appropriate forum for addressing these issues, offering solutions applicable across Europe rather than on a country-by-country basis, as the CNMC is currently doing.
Booking,com was founded in 1996 in Amsterdam and has grown from a small startup to one of the world’s leading digital travel companies. It’s part of Booking Holdings Inc. and provides lodging reservation services for approximately 3.4 million properties across 220 countries and territories.
Also read: The most searched city on Booking.com