Lords report recommends greater transparency for OTAs and reviews websites

By Emma Eversham contact

- Last updated on GMT

The House of Lords report recommends the CMA enforces greater transparency on websites such as online travel agents and reviews websites
The House of Lords report recommends the CMA enforces greater transparency on websites such as online travel agents and reviews websites

Related tags: European union, European commission

A report by the House of Lords is calling for an urgent investigation into the way online platforms, such as online travel agents (OTAs) and reviews websites are allowed to operate to ensure greater transparency for consumers and fairer competition for business.

The House of Lords Select Committee hopes the Competition and Markets Authority (CMA) will adopt recommendations within its report Online Platforms and the Digital Single Market, published yesterday (20 April) to create a ‘truly competitive marketplace’.

One area of the report looks at the presentation of search results on a range of consumer-facing websites, including OTAs.

It recommends platforms provide the criteria on which they provide search results after a hotel chain, submitting evidence anonymously, had expressed concerns about the ‘mismatch’ between the presentation of search results and consumers’ expectations.

The chain said the majority of consumers used OTAs to get the lowest price, yet many hotel searches on OTAs were listed by price by default. Instead, hotels are told that the more commission they paid to OTAs the higher they would appear on searches, which the chain said was not made clear to consumers.

Ufi Ibrahim, chief executive of the British Hospitality Association (BHA) welcomed the report.

"These OTAs wield vast power and hold our industry hostage by commanding punitive rates of commission," she said. "We are pleased that this influential committee is proposing Europe wide steps to enable our industry to challenge anti-competitive online practices when they arise. The BHA calls upon the government and policy makers in the European Commission to support our lobbing in this area and get engaged – this is a significant step forward for our industry and we want to see the momentum continue." 

Reviews review

In its report, the Select Committee also said ratings and reviews systems used by websites should be made to be more transparent and there should be an 'accessible policy for handling negative reviews' following concerns about the integrity of rating and review systems online raised by the CMA, Which? and Citizens Advice. It said The Bed and Breakfast Association had also claimed OTAs did not “check their ‘reviews’ were written by someone who actually booked the accommodation reviewed. 

"The rating and review systems used by online platforms are instrumental in creating the trust necessary for consumers to engage in online transactions. To ensure transparency, however, we believe that all online platforms should have publicly accessible policies for handling negative reviews, and clearly distinguish between user reviews and paid-for promotions. We recommend that the Commission publish guidance clarifying how the Unfair Commercial Practices Directive applies to the rating and review systems used by online platforms," it said in its recommendation.  

As well as greater transparency for consumers in rankings, ratings, reviews, the BHA is calling for an outright ban on rate parity clauses which prevent hotels from offering lower rates than those on the online booking sites where they are listed. It says the practice leads to less competitive pricing for consumers. 

The recommendations will now be considered by the CMA. 

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