Booking Falls Under EU Market Power Rules

Booking.com, the popular online travel agency, is now designated as a gatekeeper under the European Union's Digital Markets Act (DMA). This designation means Booking.com will be subject to EU regulations aimed at ensuring market fairness and contestability, with potential major fines for non-compliance.

Under the bloc’s Digital Markets Act (DMA), Booking.com has been designated a gatekeeper, subjecting the online travel agency to regulations aimed at ensuring market fairness and contestability. Non-compliance with these regulations could result in significant fines, up to 10% or even 20% of global turnover.

Booking.com has been given six months to comply with the bulk of the DMA’s requirements, which include up-front rules such as FRAND (Fair, Reasonable, and Non-Discriminatory) terms and conditions for business users and a ban on self-preferencing. Immediate requirements include the obligation to inform the EU of planned acquisitions.

The European Commission expects this designation to increase choice for holidaymakers. Margrethe Vestager, Executive Vice President and competition chief, stated, “Holidaymakers will start benefiting from more choice and hotels will have more business opportunities.”

Booking.com becomes the seventh gatekeeper to be subject to the DMA regime, joining Alphabet, Apple, Amazon, ByteDance, Meta, and Microsoft, which were designated in September last year. The EU has initiated non-compliance investigations into aspects of Alphabet, Apple, and Meta’s compliance proposals.

Although Booking.com's intermediating platform was not included in the initial wave of DMA designations due to the pandemic's impact on its travel business, the company notified the EU on March 1 after crossing the threshold of 45 million monthly active users and 10,000+ yearly active business users.

In response to the designation, a Booking.com spokesperson stated, “We have been working with the European Commission for some time as we anticipated today’s decision. We are reviewing their designation decision now and will continue to work constructively with them as we develop solutions to comply.”

In related news, the European Commission has decided not to designate the advertising platforms of social networking sites TikTok and X as DMA core platform services, as neither was deemed an important gateway. However, an investigation has been opened into whether X’s social networking platform should be designated. Although X meets the DMA’s usage thresholds, the company argues against regulation. The Commission will further consider X’s arguments against designation, with the investigation expected to be completed within five months.

Booking.com's designation as a gatekeeper under the EU's Digital Markets Act signals a new era of regulation for the online travel agency. This move, aimed at ensuring market fairness and contestability, highlights the EU's commitment to promoting competition and protecting consumers in the digital marketplace.