A British competition watchdog has dropped an investigation into hotel booking rate discount, claiming a "restriction on administrative priority grounds".
The Competition and Markets Authority was handed the investigation in September last year after Skyscanner won a tribunal to quash an earlier agreement between its predecessor (The Office of Fair Trading) and InterContenental Hotels Group, Booking.com and Expedia.
The deal enabled online travel agencies (OTAs) and hotels to offer discounts to consumers who joined a closed membership scheme.
The OTAs would have been required by hotels to prevent rate discounts from being publicised outside the membership group -- something Skyscanner protested.
The ruling would mean OTAs and hotels would have to renegotiate their contracts with other parties to make sure that any promises of transparency or best-rate parity were removed.
One year on and the CMA says, despite ending the investigation, it will maintain a "careful watch" on how the markets develops in the UK and in other European markets where regulators have ruled against the rate parity agreements between online travel agencies and some hotel groups.
The regulator's senior director for antitrust, Ann Pope, says it is "a sensible point" for it to "take stock and refocus our activity in this important sector".
"It is too soon to tell whether or not the changes made by Booking.com and Expedia will materially change how hotel rooms are priced on the internet.
"Vertical restraints in online markets, where a business imposes pricing or certain other restrictions on another business operating at a different level of the supply chain, remain a serious concern for the CMA where they result in consumers losing out.
"As always, we will give serious consideration to taking enforcement action in any sector where we suspect a breach of competition law which gives rise to consumer harm."
Despite winning the tribunal last year, Skyscanner says it does not object to the CMA closing the investigation, primarily as it "risked adding another contradictory decision to an already confused marketplace".
The UK-based metasearch engine's chief legal officer, Carolyn Jameson, argues that the issue has not away and there remains a restriction on competition in the online hotel booking sector.
She says the current set-up does not "promote competition or enable consumers to get the best rates", adding:
"Hotels are faced with the prospect of undercutting the prices available on their own website, and then paying commission on top, in order to offer better rates to smaller online travel agents.
"Hotels are also prevented from making the most of the marketing opportunities metasearch sites like Skyscanner provide, to bring reduced rates to consumers."
NB:Hotel booking laptop image via Shutterstock.