Indian Online Travel Agent Joins Ranks of Those Being Investigated for Potential Consumer Abuses
(“MakeMyTrip faces battery of allegations of unfair business practices following merger,” MLex Market Insight on Nov 1, 2019)
Indian (and Nasdaq listed) online travel agency (OTA) MakeMyTrip is the latest online travel platform to face scrutiny over allegedly questionable business practices. The Competition Commission of India (CCI) has ordered an investigation of the OTA following receipt of a complaint from the Federation of Hotel & Restaurant Associations of India (FHRAI). The FHRAI complaint contains a number of allegations that should be familiar to our readers – market dominant position (63 percent of domestic online market), excessive commissions (22-40 percent) and broad rate and availability parity requirements. Findings from the investigation are expected in four to five months.
Japanese distributor Rakuten leads off this week’s Update with a story detailing the circumstances leading to the distributor’s recent commitment to abandon all contractual parity requirements. Enjoy.
It’s Official: Rakuten Eliminates All Parity Requirements
(“Travel platform Rakuten becomes first firm in Japan to commit to remedies by eliminating parity clauses,” MLex Insight on Oct 25, 2019)
Japan’s Fair Trade Commission (JFTC) announced this past Friday that Rakuten (Japan’s largest domestic online travel platform) has officially committed to remove all rate and availability parity obligations in its contracts with the nearly 33,000 hotels listed on its site. The commitment will run for three years, at which point Rakuten’s industry position will be re-examined. It’s unclear what effect Rakuten’s commitment might have on Booking.com or Expedia, both of which were part of the JFTC’s investigation that began in April with raids on each distributor’s Japanese offices.
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.