One thing you can say about the European Commission (EC) when it doesn't like something, it acts pretty quickly. With the powers of judge, jury and executioner, the EC has broader powers than those of the usual sovereign state authorities.
Bill McCollum, the Florida Attorney General
filed suit against Expedia and Orbitz this afternoon, opening the next chapter in the ongoing fight over occupancy taxes. Florida is the first state to take such a step - all of the previous actions have been filed by cities or groups of cities in a specific state.
Late last week, a jury in San Antonio delivered a verdict on a class-action suit against the major OTAs that was brought by around 170 cities in Texas. The verdict against Expedia, Orbitz, Travelocity and Orbitz is for $20M plus court imposed penalties and interest.
While this sounds dire, (and if you read the lawyers
press release you would think this was a slam-dunk) a detailed analysis beyond the headlines should give the edge to the OTAs. Why?
Death and taxes. Ben Franklin was right-on the money when he said that these were the only certainties in life. But while we may not have a say in how the former plays out, we can certainly exercise some control over the latter--especially the ubiquitous and seemingly ever-increasing taxes we pay for traveling on business or meetings. You may not be able to actually escape paying municipal taxes on hotel rooms, car rentals and meals, but as a meetings or purchasing manager, you can certainly limit tax spending by carefully choosing where that money is spent.
Finally it seems that the esteemed powers that be in Washington DC pay attention to the Professor's Blog. OK so that is what I would prefer to believe other than to think that independently the
US Senior Congressman from Minnesota and Chairman of the US House of Representatives Transportation Committee came up with this idea on his own. And what is the idea? Taxes: ie That the process by which ancillary revenue is charged to the customer by the airlines was actually lowering the amount of potential revenue that the US government received for things like the FAA. (Oh yes and paying back some of its recently increased obligations). I say potential because this has not been proved.
