October 13, 2010
Hotel News Resource is reporting that following an announcement by the U.K. Office of Fair Trading that it will be commencing an investigation into alleged price-fixing in the online travel market, Skoosh.com is requesting that the Canadian Competition Bureau commence an investigation into the hotel industry in Canada.
Hotel News Resource has reported:
“After the announcement last week by the Office of Fair Trading (O.F.T.), the United Kingdom’s competition bureau, that it will be investigating claims of price fixing in the online travel market, Skoosh.com has additionally urged the C.B.C. to review a similar case in Canada.
In an open letter published on the company’s blog, Skoosh director Dorian Harris, requested the C.B.C. to look again at the state of the country’s hotel industry before waiting for a conclusion to the case in the U.K., noting ‘if you wait until it is finalised it may be too late to rescue the Canadian hotel market’.
In the new claims, Harris has named Delta and SilverBirch Hotels, two of Canada’s major hotel chains, as potentially in breach of competition law. No statement has yet been made by the Canadian Competition Bureau.”
In its announcement regarding its investigation into alleged price-fixing activities in the UK online booking market, the OFT stated:
“The OFT is conducting a formal investigation into suspected breaches of competition law in the hotel online booking sector and has written to a number of parties in the industry to request information.
The investigation is at a very early stage and the OFT will not be in a position to conclude whether it considers the law has been infringed until it has completed its investigation and assessed the available evidence.”
For the OFT’s announcement see: Investigation into the hotel online booking sector.
As a result of recent amendments to Canada’s Competition Act, price-fixing agreements between actual or potential competitors are now per se illegal (i.e., without the necessity to prove any adverse market effects) and subject to potential fines of up to $25 million. As a practical matter, Canada’s new conspiracy regime means that it is more important for parties involved in competitor collaborations (e.g., joint ventures, strategic alliances, etc.) and activities involving competitors (e.g., trade association activities) to take steps to reduce potential competition/antitrust law risk.
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