Both Google and Expedia are featured prominently in this week’s Update, particularly Barry Diller and his many colorful statements made during last week’s Expedia earnings call. Enjoy.
Under Mounting EU Pressure, Google Adds Direct Links
(“Google Bows to European Pressure and Tests Adding Travel Rivals’ Direct Links,” Skift Travel News on Feb 10, 2020)
When it rains it pours, particularly if you are Google…Last week, the search engine’s many ongoing regulatory battles in the EU took center stage as Google began its appeal of the European Commission’s $2.6 billion fine for allegedly biasing shopping results and engaging in anti-competitive behavior in vacation rentals (alleged by 34 travel competitors who wrote letters to the European Competition Commissioner). At the same time, news of Google’s limited testing in the EU of a “carousel” of unpaid direct links to Google travel competitors placed above Google’s own featured travel products and services garnered the attention of many. Tests of these new direct links – for travel, jobs and local listings – have apparently been underway for the past several months in countries, including France, Germany, Spain, Italy, Belgium, Denmark, the Netherlands, Sweden and the United Kingdom. What effect these new links might have on European regulators and whether Google will roll out these changes in the United States (where it is also facing antitrust scrutiny) remain to be seen. More to come…
We lead off this week’s Update again with a story regarding ongoing regulatory activity in the EU. Enjoy.
European Commission Close to Wrapping up its Multi-Year Pricing Probe into Meliá Hotels and Tour Operators
(“Meliá Hotels' EU pricing probe heads to conclusion,” MLex Insight on Feb 7, 2020)
All indications signify that the European Commission is close to completing its multi-year pricing investigation into European tour operator pricing. The investigation is the result of an effort that began in May 2015 when the Commission announced a broad review of the online distribution of goods and services. In February 2017, the Commission focused its efforts on probes into (a) retail price maintenance efforts by electronics manufacturers and (b) the systematic partitioning of the EU market by both video game publishers and tour operators (and certain hotel partners like Meliá Hotels). As for tour operators, the Commission was focused on allegations that some of the largest European tour operators (Thomas Cook and TUI) and/or hotel groups were using geo-blocking technology to restrict access to certain discounted rates to residents in certain EU countries while providing those rates to residents in other EU countries (i.e. location-based discrimination). The announcement that regulators were prepared to discuss the results of their probe last week signals a likely end to the Commission’s investigation and upcoming announcement of enforcement remedies.
Luxury-Goods Makers Making the Case for Permissible Distribution Controls
(“New EU online-sales rules should step up fight against free-riders, luxury-goods makers say,” MLex Insight on Jan 31, 2020)
Why, you might ask, are we leading with a story on luxury-goods makers’ fight for permissible distribution controls in the EU? In short, because the same EU regulations and European Commission (EC) decisions applying those regulations that affect luxury-goods makers’ ability to govern the online distribution of their products by third parties are (rightly or wrongly) finding their way into the lodging industry. If you’re not already familiar with the Vertical Block Exemption Regulation (VBER) or the European Commission decisions in Coty or Guess, you may soon be. While there are both factual and legal arguments as to why the VBER and related EC decisions are not applicable to hotel distribution, distributors and wholesalers operating in the EU are increasingly relying on the VBER and related decisions to reject efforts by hoteliers to avoid the display of their properties on certain troublesome distribution platforms, to impose industry standard keyword restrictions or to require the purchase of negative keywords. Luxury-goods makers, which fear the inability to control the method and manner of online distribution of their luxury products on well-known discount platforms such as Amazon and Alibaba, have taken up the fight in favor of updating the VBER and its anti-trust exemptions permitting certain sales tactics.
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.