Booking.com, one of Europe’s few tech giants, has hit out at EU plans to regulate it as a “gatekeeper” in the hotels market, warning that efforts to “handcuff” it will give an advantage to foreign rivals and hurt the bloc’s tech industry.
The backlash from the online travel platform comes as Brussels is preparing sweeping legislation to curb the market dominance of Big Tech, including plans to impose more stringent rules on up to 20 of the largest companies. Glenn Fogel, chief executive of the online booking site, said it was “shocking” that regulators were considering criteria that would make Booking.com subject to tougher EU regulations aimed at helping smaller rivals thrive.
“We are one of the very, very, very few tech successes in Europe. Let’s be obvious and blatant about this. And our government regulator wants to handcuff us,” Mr Fogel told the Financial Times. More onerous rules would, he said, “hobble” Booking.com, which has global revenues of $15bn, while potentially benefiting foreign rivals such as Expedia of the US and China’s Ctrip.
“European companies will suffer,” he added. The EU does not plan to single out individual entities, fearing legal challenges over unfair targeting. But privately officials say they are devising measures that would hit up to 20 tech giants. The proposals are still being fiercely debated within the EU and no decisions have been made, people with direct knowledge of the discussions said.
Governments including France and the Netherlands, however, support greater EU powers to curb Big Tech, including options such as structural separation of companies or even exclusion from the single market. EU officials have said Netherlands-based Booking.com is very likely to be captured in the measures as a market “gatekeeper”, making it a rare European company that could feature alongside US giants such as Google and Amazon.
The inclusion of European tech groups would help deflect criticism that the rules are aimed squarely at curbing the power of Silicon Valley. Mr Fogel described the prospect of Booking.com being labelled a gatekeeper as “crazy”, saying that only 13 per cent of all hotel revenues in Europe come from the site. “That means 87 per cent of transactions are being done somewhere else,” he added. “That sounds like a lot of choice.”
But people familiar with Booking.com say it charges high fees and rather than being a tiny challenger, has increasingly become the online platform in Europe through which hotels access customers. Robin Rossmann, managing director at hotel industry data group STR, said that Booking.com and Expedia dominated the market, but the former was by far the stronger in Europe.
“Ultimately, online travel agencies [OTA’s] are better placed to market hotel rooms at discount rates,” he said, adding that there needed to be a focus on “fair practices” in the way that the big platforms operated.
According to Statista, Booking.com is the biggest participant in the European OTA market with a 67.7 per cent relative market share last year. But Mr Fogel said: “We have lots of competitors who are very well funded. If they can do things which we can’t do, then we will be at a great disadvantage.” The criticism is an early sign of the challenges the EU faces in curbing the power of Big Tech, which is at the centre of its upcoming Digital Markets Act.
The act will impose strict regulations on all areas from search engines to social media, which critics have said is designed to target mainly Facebook, Amazon, Apple and Google. The European Commission said: “We are working on the basis of criteria which will allow to define in an objective way who the gatekeepers are. The commission does not make legislation to target individual companies.”