UK: UK Competition Appeal Tribunal Sets Aside OFT Commitment Decision In Online Hotel Booking Probe

On 26 September 2014, the Competition Appeal Tribunal ("CAT") quashed the decision of the Office of Fair Trading ("OFT", now the Competition and Markets Authority, "CMA") in the online hotel booking case (see VBB on Competition Law, Volume 2014, No. 2, available at www.vbb.com). The CAT found that the OFT did not properly consider concerns raised by a provider of a price comparison website, Skyscanner, and two other stakeholders in relation to the commitments accepted by the OFT in its contested decision. The commitments provided that specific discount information on hotel rooms would be disclosed only to members of so-called closed groups consisting mainly of customers who had actively opted in to become a member of a group and made a previous booking at the headline rate. Skyscanner raised concerns that the restriction on disclosure of specific price information outside the 'closed groups' could have a negative effect on inter-brand competition as customers would be unable to use price-comparison sites to compare the actual room prices and discounts offered by different hotels.

The CAT observed that price comparison websites promote price transparency which, in turn, promotes competition in dynamic markets. The CAT further noted that the OFT had viewed Skyscanner's concerns as 'plausible' but failed to properly investigate them. In particular, the OFT had asked Skyscanner to produce evidence of competitive harm, while in these circumstances it was incumbent on the authority to examine itself the 'plausible' concerns further. The CAT found that, in imposing additional probative requirements, the OFT had acted unfairly and rendered the process by which the commitment decision was taken procedurally improper. While observing that "[r]estricting access to [specific price] information may be seen as an obvious error and were this an appeal 'on the merits' we might well wish to quash the decision on these grounds", the CAT, constrained by the scope of judicial review, "somewhat reluctantly" refrained from substituting its own assessment for that of the OFT. It therefore quashed the OFT decision on grounds of procedural impropriety and remitted the case to the CMA with a direction to reconsider the matter in accordance with the judgment.

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