Düsseldorf, Berlin Booking.comCEO Glenn Fogel warns against paralyzing the largest hotel booking portal in Europe with strict EU rules. “Booking.com is one of the few success stories from Europe,” he says in an interview with Handelsblatt.
If the EU Commission classifies the company as a platform requiring special regulation, it would be “a huge mistake,” says Fogel. That would “unfortunately prevent Booking.com from developing new offers for travelers and hoteliers”.
In a few weeks’ time, the Brussels authority will present proposals for a “Digital Markets Act”, which should provide for special rules of conduct for platforms with powerful markets. Should Booking.com be classified as such a “gatekeeper”, the company would probably no longer prescribe hotels to offer their customers special conditions via their own website, for example.
For the search engine company Google the American, however, considers stricter rules to be appropriate. “Regulators should definitely look closely at Google,” he said. “It absolutely looks like they are using their dominance in Internet search to penetrate other fields with unfair methods.”
Read the full interview here:
Mr. Fogel, the EU Commission is planning stricter rules for the digital economy. What can you expect?
What we hear about the possible new regulation from Brussels worries us very much. We don’t mind good rules like those in the General Data Protection Regulation – they can help the markets. But bad rules can do a lot of damage.
The guidelines from Brussels are aimed primarily at powerful platforms that set rules for other companies and can direct user flows on the Internet. Are you concerned that the Commission will classify Booking.com as such a gatekeeper?
It would be a huge mistake to do that! Booking.com is one of the few success stories from Europe. If we want to build a tech industry here, we need large companies that train talent. This is crucial for competing with the US and China.
How European is Booking anyway? The holding company is based in the USA, as are you.
But that is all that is not European about us. We pay almost all of our taxes in Europe, most of the employees work in Amsterdam, Great Britain or Berlin. And most of the customers come from Europe.
“The selection is huge”
Booking.com is the market leader in Europe for online hotel booking. So why shouldn’t you be classified as a gatekeeper?
Independent studies show that the hotels only generate 13 percent of their turnover through us.
If you only look at online booking, your market power is quite different.
Why do you make a difference in how someone books?
Young people grow up organizing everything through their smartphones and the internet. The trend will intensify.
OK. For example, if you type in “Hotels in Paris” on Google, you will find hundreds of pages with offers. Or let’s say you take your mobile phone to book: You can use an app or go to the hotel website and click on “call”. You can now also over Facebook book a room. The choice is huge.
The hoteliers are your customers too. What’s up with them?
They too have many options to offer their rooms. They sell more than half of the rooms directly. In addition, you can offer these with us and other platforms or through tour operators such as Tui.
Nevertheless, you can tell them that they are not allowed to offer their rooms for less than you are on the site. The EU wants to prevent this from happening to powerful companies in the future.
If it were different, people would choose the nicest hotel from us and then call and ask: I saw their room for 100 euros. Can you give it to me for less? And we wouldn’t get anything for recruiting your customers in more than 40 languages and promoting them on Google.
“Regulators should look closely at Google”
Still, if you can enforce these rules, it’s market power, isn’t it?
We can’t force anyone. Some hotels leave our platform because they don’t like the conditions.
If Booking isn’t a gatekeeper, who is?
First, such a company should interact with a large number of people. Second, there should be barriers for other companies to enter the market. The most important question, however, should be whether users have alternatives.
So only corporations like Google Apple, Facebook and Amazon?
Regulators should definitely look closely at Google. What market share do they have, 80 or 90 percent? We have 13, that’s a small difference. And it absolutely looks like they are using their dominance in Internet search to penetrate other fields with unfair methods. Then rules are correct. But I would actually prefer to talk about my company.
So: what exactly would the planned EU requirements mean for booking?
Unfortunately, they would prevent Booking.com from developing new offers for travelers and hoteliers. If such rules had existed years ago, we would not have been able to develop our own app. We should first have discussed with the regulator whether we should be able to occupy this new field at all.
Today it’s about whether we should be able to offer package deals for hotels and excursions. Our main competitors are already selling such packages, but we would have to discuss them with the regulator first. That would slow us down while our competitors rush ahead. Do we want that Expedia who becomes a great provider?
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