Booking.com Will Fall Under EU's Tougher Competition Rules

The European Union (EU) has announced that Dutch online travel giant Booking.com will now be subject to stricter competition regulations.

EU Classifies Booking.com as Gatekeeper, Launches Investigation into X

This development places Booking .com on a list of major digital firms that must adhere to the EU's Digital Markets Act (DMA), aimed at ensuring fair competition in the digital sector.

The European Commission stated that it would also investigate whether Elon Musk's X can be exempt from these rules. Formerly known as Twitter, X has argued that despite meeting the DMA's thresholds, it does not function as a gateway between businesses and consumers.

The Commission's investigation into X's status is expected to conclude within five months.

The EU's press release detailed that Booking's self-assessment, submitted on March 1, confirmed it met the necessary criteria to be classified as a gatekeeper. This classification is based on Booking .com's role as a link between businesses and consumers through its online intermediation service.

The Commission has also decided not to designate X Ads and TikTok Ads as gatekeepers despite their meeting quantitative thresholds. ByteDance, the parent company of TikTok, also submitted a rebuttal, which led the Commission to decide that TikTok Ads, like X Ads, does not qualify as a crucial gateway between businesses and consumers.

Booking's Obligations Under the DMA

Booking.com must now comply with various obligations under the DMA within the next six months. These obligations are designed to enhance consumer choice and ensure fair access for business users to gatekeeper services.

The platform is required to submit a comprehensive compliance report detailing how it intends to meet each of the DMA's mandates. Some of these obligations take effect immediately, such as notifying the Commission about any planned mergers or acquisitions in the digital sector.

The European Commission will closely monitor Booking.com's adherence to these rules. Should a gatekeeper fail to comply, the Commission has the authority to impose fines up to 10% of the company's global revenue, increasing to 20% for repeated violations.

The Commission can enforce more severe measures in cases of systematic non-compliance, including requiring the sale of parts of the business or restricting further acquisitions related to the non-compliance.

The DMA's overarching goal is to promote competitive and fair markets within the digital realm. It targets large digital platforms that serve as key gateways between business users and consumers, entities whose positions potentially enable them to act as bottlenecks within the digital economy.

Six other major digital platforms - Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft -were already designated as gatekeepers by the Commission on September 6, 2023.

"Today's good news is: Holidaymakers will start benefiting from more choice and hotels will have more business opportunities," Margrethe Vestager, Executive Vice-President in charge of competition policy, said in a press release statement.