The UK Office of Fair Trading (OFT) has accepted binding commitments from Booking.com B.V., Expedia, Inc. and InterContinental Hotels Group plc, which address concerns that restrictions on discounting a hotel's room-only accommodation rate may limit competition between online travel agents (OTAs) and between OTAs and hotels, and may create barriers to entry into the market for new OTAs.

The OFT launched a formal investigation in September 2010 following the receipt of information suggesting that vertical arrangements between OTAs and hotels could be in breach of UK and EU competition law.

To address the OFT's concerns, Booking.com, Expedia and IHG agreed to ensure that their existing and future commercial arrangements allow OTAs and hotels to offer reductions on headline room-only rates, so long as customers sign up to the membership scheme of an OTA or hotel and make one undiscounted booking with the OTA or hotel in question prior to becoming eligible for such a reduction.

The OFT believes the commitments will allow greater competition on price between OTAs and between OTAs and hotels and will allow new OTAs to enter the market.

The OFT's press release of Jan. 31, 2014 is available here.

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