Large online travel companies are watching closely as the European Commission works on proposals for new regulations for the digital economy.
The Digital Markets Act (DMA), just one part of the proposals, aims to address the power of the so-called “big digital gatekeepers.”
DMA is about enabling a level playing field for all sizes of companies within, and outside Europe, as well as ensuring choice and competitive pricing for consumers.
It is important to note that the definition of a gatekeeper is still in the works.
In a recent earnings call, Glenn Fogel, president and CEO of Booking Holdings, addressed speculation that Booking.com might be deemed one of the “gatekeepers” saying it would be wrong for a number of reasons.
“The principal reason is that the accommodations market in Europe is very open and very competitive. Consumers have multiple online and offline choices to book accommodations and accommodation providers have multiple online and offline channels for our customers.
“To put this into perspective, Booking.com booked about 7% of all potentially bookable accommodation room nights across all properties on our platform globally in 2019. Across Europe, that number was about 11%.”
More recently, Airbnb has been linked to the DMA.
A spokesperson for the company says: “Travel is a competitive industry and we do not believe that Airbnb or the sectors in which we operate raise the concerns that the Commission has identified with other companies. Competition in travel has brought significant benefits to European consumers in terms of choice, access and lower prices.”
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During a recent speech, Margrethe Vestager, executive vice president of the European Commission for a Europe Fit for the Digital Age, said the DMA was about having the “right toolkit in place” to keep digital markets fair.
She went on to talk about two pillars within the proposals - a list of dos and don’ts for “big digital gatekeepers” and, a standard investigation framework across the single market to ensure the approach is consistent across all countries.
Referring to the dos and don’ts, Vestager said: “For instance, the decisions that gatekeepers take, about how to rank different companies in search results, can make or break businesses in dozens of markets that depend on the platform. And if platforms also compete in those markets themselves, they can use their position as player and referee to help their own services succeed, at the expense of their rivals.
"For instance, gatekeepers might manipulate the way that they rank different businesses, to show their own services more visibly than their rivals’.”
She concludes that it’s now time to take action, saying the “biggest gatekeepers - threatens our freedoms, our opportunities, even our democracy.”
“So for the world’s biggest gatekeepers, things are going to have to change. They are going to have to take more responsibility, for the effects that they have on our safety and our opportunities.”
Moves from European legislators come at a time when Big Tech companies including Google and Facebook are being investigated in the U.S.
The Justice Department filed its long-expected antitrust suit against Google in late October.
The claim is that Google has abused its dominant position in search and advertising to subdue competition. At the time Google responded by calling the lawsuit “deeply flawed” and said it would not help consumers.
The European proposals are expected in the first week of December.