On 5 February 2014 we reported on how the Office of Fair Trading (“OFT”), now the Competition and Markets Authority (“CMA”), had accepted binding commitments from Booking.com, Expedia and the Intercontinental Hotel Group to change their online booking practices by requiring that customers sign up for the online travel agencies (“OTA”s) membership scheme to view specific discounts on some hotels. The full story and the reasons behind the commitments can be found here.
In an unexpected turn, on 2 April 2014, the Competition Appeals Tribunal (“CAT”) published an appeal by Skyscanner Limited, an OTA but not one of the parties subject to the OFT’s commitments, against the commitments. Skyscanner argues that it is not subject and did not agree to the commitments but that the commitments will have effect on Skyscanner and other OTAs and hotels who did not agree to them. Therefore they believe the OFT have acted ultra vires in their powers under section 31A of the Competition Act 1998. Skyscanner believe they are entitled to appeal the commitments to the CAT as an interested party under section 47(1)(c) of the Competition Act 1998 as their business will be directly and adversely affected by the commitments.
Skyscanner further contests the OFT’s decision on the grounds that the effect of the OFT’s commitments on this class of other OTAs who did not agree to the original commitments will have an anti-competitive effect and therefore the OFT have made a decision contrary to their policy of promoting competition in markets. This case is actually the first appeal under section 31A to be bought against a commitments decision. No doubt its facts are atypical and in most circumstances, commitments decisions are not challenged as the only parties adversely affected are those that agree to them.
The coming months will reveal what view the CMA will take of the OFT’s decision and Skyscanner’s appeal. It will be interesting for competition practitioners to see on what grounds Skyscanner believe they are adversely affected and how commitments designed to foster competition on some parties can be considered to have an anti-competitive effect on others.