Regulator to probe commissions on travel search engines

A British competition watchdog is to investigate the financial mechanics of how travel search sites work.

The Competition and Markets Authority (CMA) says the probe will tackle what it calls some of the “concerns expressed about DCTs” (digital comparison tools), in a general look at sites across a range of sectors, including travel.

The study will try to establish if consumers “would benefit from being made more aware of how DCTs earn money”, the CMA says, including whether this in turn will impact on the services then offered.

A second angle will be to ask if “arrangements between DCTs and the suppliers that sell through them might restrict competition”.

Acting CEO of the CMA, Andrea Coscelli, says DCTs have “made it easier for consumers to engage in many markets”, but warns:

“However, they have been more successful in some sectors than others. We want to understand why this is the case and whether more can be done to ensure consumers and businesses can benefit from them more widely.

“Some people have also raised concerns about certain issues, including whether consumers can trust the information that’s available, and the study will look at these issues too.”

Two of the UK’s leading travel search sites, Skyscanner and Cheapflights, have welcomed the investigation.

Cheapflights managing director, Andrew Shelton, says the Momondo Group-owned company wants to understand the scope of the study but any investigation that helps “build trust between brands and products like ours, and our users” is a good move.

“The beauty of the metasearch technology that powers Cheapflights is that it is wholly independent and unbiased, meaning we are able to give an honest view of a complex marketplace often corrupted by adverts and bias.

“Building trust is central to our culture, so we’d be happy to be involved in any conversation that helps consumers feel complete confidence in our commitment to provide them with fair and transparent information.”

Skyscanner’s chief legal officer, Carolyn Jameson,  agrees that “consumer trust is vitally important, and transparency should be central to companies operating comparison sites”.

“In a very busy marketplace, with a number of differing business models, we hope that the CMA investigation will highlight those players who place the needs of the consumer at the heart of their businesses, and encourage improvement from those that do not.”

She highlights how Skyscanner’s recently introduced fare provider ratings tool allows consumers to understand factors such as price accuracy and customer service levels from the suppliers of tickets.

“Skyscanner hopes that the inclusion of this feature will encourage the wider industry to improve the quality of their offering and transparency towards consumers.”

The CMA says it will publish an interim report by March 2017.

Some travel search engines have also recently spoken privately about concerns over “heavy-handed tactics” by airlines over redistribution restrictions; attempts to limit how many suppliers of a fare can be displayed in search results.

NB: Cash box image via Pixabay.

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