U.K. Alleges IHG Agreements With OTAs Violate Competition Laws

The United Kingdom's Office of Fair Trading alleged that InterContinental Hotels Group, Expedia and infringed upon competition law via rate-parity agreements that limit agents' ability to discount the hotel company's rooms in IHG's efforts to keep pricing on its own channel competitive.

In a statement of objections issued Tuesday, OFT called IHG's separate agreements with Expedia and "anti-competitive" and alleged they "could limit price competition between online travel agents and increase barriers to entry and expansion for online travel agents that may seek to gain market share by offering discounts to customers." IHG, in turn, in a statement noted that it "considers its arrangements with the online booking agents to be compliant with competition laws and consistent with the long-standing approach of the global hotel industry." IHG, Expedia and now have three months to respond before OFT makes a final ruling.

OFT's investigation, which began in September 2010, stemmed from a complaint by another OTA,, which claimed IHG's agreements prevented it from offering discounts on hotel rooms.

Outside of the involved parties, the outcome could "have wider implications as the alleged practices are potentially widespread in the industry," according to OFT. IHG is the largest hotel company globally in terms of total number of rooms, and Expedia and each are among the largest OTAs in the United Kingdom.