Hotels.com, Expedia face anti-trust probe

Seen above is a screen capture of Expedia web site.

By Lee Hyo-sik

Hotels.com, Expedia, Agoda, Booking.com and other global online travel booking sites are facing an antitrust probe for allegedly breaking Korea’s rules on consumer dispute settlements.

The Fair Trade Commission (FTC) said Wednesday it is investigating whether the policy terms of websites selling hotel accommodation and airline tickets to Korean consumers violate dispute settlement standards.

It is the first time the websites, which account for about 70 percent of Korea’s online travel booking market, have faced a government investigation for allegedly violating the FTC guidelines.

“After receiving complaints from consumers about the policy provisions of foreign travel booking sites, the FTC began a probe in the latter half of 2016,” said an industry official, who declined to be named. “The issue is that these sites impose additional fees on consumers who cancel their reservations. But under the FTC guideline, they cannot do that.”

Under the FTC’s rules, travel agencies operating online and offline must return deposits in full if consumers cancel reservations 30 days before departure.

But the foreign websites have allegedly been charging additional fees to those canceling even if they do so 30 days in advance.

The websites also are required to state the total price, including tax and handling charges. However, unlike local booking sites, Hotels.com and other global firms allegedly display prices lower than the actual charges to draw more travelers, but later add tax and other fees when the reservations are made.

The FTC has said the foreign sites should abide by its rules, as their domestic peers do, because they deal with Korean consumers. The antirust agency plans to complete the probe and announce its results in June.

When contacted, an Expedia Korea official said the company is not ready to release an official statement.

“We are currently looking into the matter,” the official said. “It is not the time for us to make an official statement.”

When contacted, Hotels.com Korea said that "Hotels.com has been contacted by the FTC regarding the availability of non-refundable rates offered by our hotel partners and is cooperating fully with the FTC’s enquiries."

The company said it offers a wide variety of rates to travelers. "Some of these products, which have great value, may have conditions set by the supplier, which restrict the ability for travelers to cancel or amend these bookings."