Klobuchar Urges Department of Justice and Federal Trade Commission to Investigate Potential Existence of Deceptive Conduct by Online Travel Agencies

/Klobuchar Urges Department of Justice and Federal Trade Commission to Investigate Potential Existence of Deceptive Conduct by Online Travel Agencies

Klobuchar Urges Department of Justice and Federal Trade Commission to Investigate Potential Existence of Deceptive Conduct by Online Travel Agencies

|2017-11-07T12:36:16+00:00November 7th, 2017|

While the large online travel agencies serve an important role in promoting consumer choice and competition for hotel and airline bookings, their size and market influence may allow them to engage in practices that could be detrimental to consumer welfare

In a letter to Assistant Attorney General Makan Delrahim and Federal Trade Commission Acting Chairman Maureen Ohlhausen, Klobuchar calls on the agencies to examine the extent to which these websites may be engaging in misleading or anticompetitive conduct, affecting the prices and levels of service available to American consumers

WASHINGTON, DC — U.S. Senator Amy Klobuchar, the Ranking Member of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, has urged the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to investigate the potential existence of deceptive conduct by online travel agencies. While the large online travel agencies serve an important role in promoting consumer choice and competition for hotel and airline bookings, their size and market influence may allow them to engage in practices that could be detrimental to consumer welfare. In a letter to Assistant Attorney General Makan Delrahim and FTC Acting Chairman Maureen Ohlhausen, Klobuchar calls on the agencies to examine the extent to which these websites may be engaging in misleading or anticompetitive conduct, affecting the prices and levels of service available to American consumers.

“As Ranking Member of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, I write to urge you to investigate whether online travel agencies are engaging in deceptive or anticompetitive conduct. While the large online travel agencies serve an important role in promoting consumer choice and competition for hotel and airline bookings, their size and market influence may allow them to engage in practices that could be detrimental to consumer welfare,” Klobuchar wrote. “Online travel agencies have become an essential element of the travel industry. In light of their continued importance, I urge you to examine the extent to which they may be engaging in misleading or anticompetitive conduct, affecting the prices and levels of service available to American consumers.”

In a March 2017 letter to the U.S. Department of Transportation, Klobuchar and Senator Jerry Moran (R-KS) raised concerns that some online travel agencies may sell unnecessarily complicated passenger itineraries, provide incorrect travel information, and fail to make appropriate disclosures to consumers. The senators also noted news reports of online travel companies imitating hotel or airline websites to confuse or mislead consumers into believing that they are booking with the official website of a specific hotel when they are booking through a third-party website.

As Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in several industries. In September, she introduced the Consolidation Prevention and Competition Promotion Act of 2017, which would strengthen antitrust laws by providing tools to target mergers that hurt consumers, stifle opportunities for business competition, and impede innovation. She also introduced the Merger Enforcement Improvement Act to provide resources and information antitrust enforcers need to promote competition and protect consumers. In May, Klobuchar and a bipartisan group of senators introduced the bipartisan Stop Online Booking Scams Act to protect consumers from illegitimate third-party websites that trick consumers into thinking they are making reservations directly with hotels.

The full text of the letter is below.

Dear Assistant Attorney General Delrahim and Acting Chairman Ohlhausen: As Ranking Member of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, I write to urge you to investigate whether online travel agencies are engaging in deceptive or anticompetitive conduct. While the large online travel agencies serve an important role in promoting consumer choice and competition for hotel and airline bookings, their size and market influence may allow them to engage in practices that could be detrimental to consumer welfare. The Competition and Markets Authority, the United Kingdom’s competition agency, recently launched an inquiry into whether hotel booking websites may be misleading consumers. The investigation will explore how search results are ranked, whether sites create a false impression of room scarcity, whether discount claims are misleading, and whether charges, such as taxes and booking fees, are clearly displayed. As many of the same hotel and travel booking sites that operate in the United Kingdom also operate in the United States, it raises the question of whether these firms may be engaging in deceptive or anticompetitive conduct in this country. Over the last few years, I have raised general concerns regarding the practices of online travel agencies. In a March 2017 letter to U.S. Department of Transportation, Senator Moran and I raised concerns that some online travel agencies may sell unnecessarily complicated passenger itineraries, provide incorrect travel information, and fail to make appropriate disclosures to consumers. We also noted news reports of online travel companies imitating hotel or airline websites to confuse or mislead consumers into believing that they are booking with the official website of a specific hotel when they are booking through a third-party website. While I received a response restating the Department of Transportation’s travel consumer protection policy, I remain concerned that the current policy does not adequately protect consumers in the online travel and lodging marketplace. Online travel agencies have become an essential element of the travel industry. In light of their continued importance, I urge you to examine the extent to which they may be engaging in misleading or anticompetitive conduct, affecting the prices and levels of service available to American consumers. Sincerely,

Contact: Kirsten Hartman

Kirsten Hartman

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