EXCLUSIVE: Travel site biz raided for alleged unfair practices

April 10, 2019

Tokyo--Japan's Fair Trade Commission on Wednesday raided three major travel website operators for allegedly concluding unfair contracts with domestic accommodation facilities in violation of the antimonopoly law, Jiji Press learned.

The three companies are Rakuten Inc. <4755>, the operator of the Rakuten Travel site, as well as the Japanese arms of global industry giants Booking.com and Expedia.

The commission suspects that accommodation fees have been set higher than normal amid a surge in visitors from abroad ahead of the 2020 Tokyo Olympic and Paralympic Games.

Informed sources said the three allegedly included "most favorable treatment" clauses in their contracts with hotels and "ryokan" Japanese-style inns in the country. Under the clauses, accommodation facilities must offer equal or lower prices than on their own websites or the three sites' rivals.

The clauses are believed to have forced accommodation facilities to refrain from offering low-priced plans, keeping prices at high levels and obstructing fair competition.

The antitrust law bans major business operators from concluding such a clause with clients, regarding such practices as restrictive trading.

According to a report by research firm Phocuswright Japan, total Japanese trading value on travel sites in fiscal 2017 is estimated at 2,243.2 billion yen, up 20 pct from fiscal 2015.

Rakuten Travel and Recruit Lifestyle Co.'s Jalan.net site each hold a 20 pct market share, followed by overseas sites at a total of 18 pct.

Regarding such a clause, competition authorities in European countries have launched probes into Expedia and Booking.com over the issue.

Booking.com in 2014 proposed commitments to remedy concerns over the matter.

Rakuten and Booking.com said they will cooperate with the FTC investigation. Jiji Press