- 8 Sep 2023 4:51 AM
- Hungary Today
The scandal involving the travel site began in the summer after it emerged that the company had failed to pay several accommodation providers, including Hungarian ones.
In response to a request from Index, the authority said that in the course of accelerated sectoral investigations, they may also conduct on-site investigations with the permission of the courts based on the mandate of the Competition Act.
This is an efficient and rapid intervention tool to support the authority in gathering the information necessary to detect and address market disturbances.
Over the last two days, the Competition Authority’s experts have visited several sites without prior notice to collect data from operators in the online accommodation market.
In this context, the investigators also visited the Budapest office of Booking.com on Tuesday and Wednesday, where data collection is ongoing.
The Hungarian Competition Authority stressed that its priority is to protect Hungarian accommodation providers, so the body has acted swiftly and is currently working hard to identify and solve the market problems.
Since then, the authority has issued an official statement saying that it is still collecting data and will soon find out whether the Dutch accommodation provider’s contracting practices have led to a breach of free competition in the online accommodation booking market.
As reported earlier by Hungary Today, Booking.com was several weeks behind with the payment of accommodation fees in July. Like foreign hosts, domestic ones were also outraged by the delayed payments, affecting them particularly painfully during the high season.
The travel portal cited the maintenance of its financial system between July 1 and 11, and said that it had issued a notice in advance informing accommodation providers that payments for guests checked in between June 28 and July 19 will be made by July 24, and the normal payment schedule will be fully restored by July 27.
However, Booking.com failed to meet the deadlines indicated in the notice.
The previously announced deadline of July was later modified, and the modified deadline was extended several times, while payments were made, but – as it turned out – only a few people received the accommodation fees. However, it is not known how many people were not paid, nor how many were affected.
Eventually, Booking.com promised payment on August 14 to accommodation providers whose transactions have been delayed for weeks. According to some sources, this has been fulfilled almost 100%.
According to market information received by the Hungarian Competition Authority, the contractual terms and business practices of Booking.com have caused significant disruption to a number of domestic accommodation providers, with dozens of complaints in recent weeks that they have not received the accommodation rates they were due.
Once the information gathering and data analysis is complete, the authority will summarize the results of its fast-track sector inquiry in a draft public report.
It was noted that on August 15, at an extraordinary meeting of the Tourism Subcommittee of the Economic Affairs Committee of the National Assembly, the President of the Competition Authority, Csaba Balázs Rigó, announced that he considered an accelerated sector inquiry into the online accommodation booking and services market to be necessary.
The Competition Authority officially launched the procedure on August 24. A comprehensive investigation into the online accommodation booking market was already carried out in 2016, and in recent years commercial practices towards consumers have also been monitored.
The Dutch operator was fined €2.5 billion in 2020, for using psychological pressure, the highest ever fine of its type imposed by the Competition Authority for consumer protection.