Booking.com has been designated a gatekeeper under the Digital Markets Act after decision announced Monday by the European Commission.
The decision follows almost a year of uncertainty for the online travel giant, which announced last July that it it was in constructive conversations with the Commission.
It added: “As a result of the impact of COVID-19 on our business, we do not meet the DMA’s quantitative thresholds for the time period associated with the July 2023 submission deadline. We are aligned on this with the European Commission. However, we expect that these thresholds will likely be met at the end of this year, in which case we would expect to notify the European Commission of that fact within the required deadlines.”
The European regulator published the first list of companies that met the criteria last year. They include Google, Apple, Meta, Microsoft and Amazon.
According to a release from the commission, Booking now meets the “relevant thresholds” after it submitted a self-assessment on March 1.
Less than a week later during ITB Berlin, Booking Holdings president and CEO Glenn Fogel called for “smart regulations” in Europe.
“Why do we need to be part of the DMA?" Fogel said at the time. "Again, as I pointed out, we may be a larger company than many in the travel industry but a very, very small company compared to the others. When you see the size of Google or Meta or any of the others, we're a tiny little minnow, and I'm not sure what problem they're trying to solve. What exactly is the problem? Is there not enough competition? This is the most competitive industry in the world. But, OK, this is the law, we'll go with it because we fit the qualifications that they have put out. Now let's work cooperatively to come up with what will be the best way to implement or what are the ramifications of it.”
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Booking must now “offer more choice and freedom to end users and fair access of business users to the gatekeeper services” within the next six months to comply with the DMA.
The statement adds: “However, some of the DMA's obligations start applying with immediate effect, for example, the obligation to inform the commission of any intended concentration in the digital sector.”
Margrethe Vestager, executive vice president in charge of competition policy for the European Commission, said, “Today’s good news is: Holiday makers will start benefiting from more choice, and hotels will have more business opportunities. Following our decision Booking.com joins the list of core platform services required to adhere to DMA rules."
The commission will monitor Booking’s progress in complying with the DMA and can impose fines of 10% of the OTA’s worldwide turnover, rising to 20% if the company repeatedly breaks the terms of the DMA.
A statement from Booking said: "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."
Meanwhile, Jake Fuller, managing director and digital services analyst with BTIG said the DMA move does not change its outlook for Booking Holdings for 2024-2025. He said that while rate parity clauses would likely have to be struck from contracts with hotels, a number of European countries already banned rate parity between 2015 and 2018.
The company has also been asked to supply information as the European regulator eyes large online platforms and search engines which might come under the Digital Services Act.