EU proposes new rules to combat the "unfair" practices of OTAs and search engines

The European Commission has this month proposed new rules to combat “unfair trading practices” by online platforms including online travel agents (OTAs) and search engines including Google.

The Commission said hotels, B&Bs and guest houses would be among those to benefit from the rules aimed at creating “a fair, predictable, sustainable and trusted business environment” online.

The proposals provide for “increased transparency”, the introduction of dispute resolution schemes – including a right for trade associations to bring court proceedings – and the establishment of an EU body to monitor the effectiveness of the measures.

“Providers of online intermediation” including Booking.com, Expedia, Google, Facebook and others will be required to publish policies detailing:

• “How they treat their own goods and services compared to those used by professional users"; and
• “How they use contract clauses to demand the most-favourable range or price of products and services.”

They will also be required to “set out the general criteria that determine how goods and services are ranked in search results”. (The B&B Association gave evidence to the EU and CMA of how OTA search rankings of B&Bs and hotels are misleading and manipulated.)

They would also have to give “reasonable minimum notice” of changes to terms and conditions. This proposal would prevent abuses such as the minimal notice recently given by one big OTA to B&Bs and hotels about its change of treatment (in the OTA's favour) of commission on cancellations, for instance.

Explaining the new rules, the Commission said: “The current position of online platforms as mediators of business - customer relationships allows them to engage in unfair trading practices that can cause significant economic harm to the businesses that use them.”

Elżbieta Bieńkowska, EU commissioner for the internal market, industry, entrepreneurship and SMEs, said: “[This] approach will give EU businesses the transparency and redress mechanisms that will help them embrace the digital economy.”

Mariya Gabriel, commissioner for the digital economy and society, added: “Platforms and search engines are important channels for European businesses to reach consumers, but we must make sure they are not abusing their power.”

David Weston, chairman of the Bed & Breakfast Association, said: "Although we have not yet been able to study the small print of these very detailed EU proposals, we are delighted that they do seem to be going in the right direction.

"Having held a number of meetings with MEPs and officials in Brussels over the last two years to explain our members' concerns, we are pleased to see that the Commission seem to have understood that the online platforms have been abusing their market dominance, and that the balance or power needs to be redressed in favour of small businesses, and in favour of honesty to the consumer too."

We will keep members informed of the progress of these draft regulations, which the Business, Enterprise, Innovation & Skills department (BEIS) told us last Friday are expected to be passed into UK law (after any revisions made during the consultation process) by the time the UK leaves the EU.