TripaAdvisor, Expedia and Booking.com are under investigation by the Italian Competition Authority.
TripAdvisor is the target of the latest investigation, announced Tuesday. The authority has begun proceedings over alleged unfair trade practices, looking into whether the online travel planning service does enough to eliminate fake reviews from its recommendation engine.
The investigation was triggered by numerous complaints from consumers and venue owners about the reviews. The Italian National Consumers’ Union, UNC, had also filed a complaint, the authority said.
The UNC welcomed news of the investigation. The trustworthiness of reviews is critical not just for consumer protection, but also for the credibility of the hoteliers, according to UNC secretary general Massimiliano Dona. “We constantly receive reports from tourists who chose a hotel or restaurant based on advice found on the web, but who were disappointed,” he said in a posting to the UNC website.
“It’s in TripAdvisor’s interest to ensure the reliability of the ratings,” Dona said. Only by doing so can the service avoid imploding under the weight of suspicion that it is only serving its own interests and not those of its users, he added.
TripAdvisor declined to comment on the investigation. The company said it fights fraud “aggressively” and is confident in its automated systems and manual processes for identifying and dealing with fraudulent or inaccurate reviews.
On Monday, the authority announced a separate investigation into two other online travel companies, Expedia and Booking.com. It is concerned that the two companies made agreements with hotels that limit competition between different sales channels on price and booking conditions, making it harder for consumers to find the best offers.
At issue are “best price” clauses, sometimes known as “most favored nation” clauses, in the companies’ contracts with hotels using the service to handle bookings, which the authority said prevent the hotels from offering better deals through other sales channels—including through their own websites. According to the authority, such clauses restrict competition in two areas: the fees charged to hotels by intermediaries such as Expedia and Booking.com, and the prices of hotel services.
The authority expects to complete its investigation by July 30, 2015.
It’s not Expedia’s first brush with European antitrust authorities.
Last November, the French General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) filed suit against the company, alleging that its website hotels.com also used anticompetitive contracts containing best price clauses. At the time, it said it was also preparing to file suit against another online reservation platform before the end of the year.
In December it was the turn of the German Cartel Authority, the Bundeskartellamt, to attack. It gave the booking portal HRS until March 1, 2014 to remove best price clauses from its contacts with hoteliers, and said it had begun similar actions against Expedia and Booking.com.
January saw the U.K. Office of Fair Trading close an investigation into anticompetitive pricing restrictions by Expedia and Booking.com after they and InterContinental Hotels Group agreed to allow competitors to discount hotel rates.
The companies did not immediately respond to requests for comment on the Italian investigation.