- Hilton, Marriott, IHG and CoStar face UK data sharing investigation.
- The CMA said no assumptions should be made about a law breach.
- The probe reflects the CMA’s focus on competition and consumer protection.
THE U.K.’S COMPETITION and Markets Authority is investigating data sharing by data firm CoStar and Hilton Worldwide Holdings, Marriott International and IHG Hotels & Resorts. The CMA is examining whether the companies used CoStar’s data analytics tool STR to make commercial decisions.
The investigation reflects the CMA’s policy on ensuring new technologies support competition and do not harm consumers, the regulator said in a statement.
“At this stage, no assumptions should be made about whether the law has been broken,” the CMA said. “Following investigation and information gathering, the regulator may issue a statement of objections if it provisionally finds that competition law has been infringed.”
The companies involved are reportedly cooperating fully with the CMA’s inquiries.
The regulator noted that when rival businesses share sensitive information, including via a third-party analytics provider, it reduces uncertainty about each other’s actions.
“This can affect competition by making it easier for companies to predict and coordinate their behavior,” the CMA said.
“Companies use various types of data analytics tools and algorithms to help them make commercial decisions,” the UK regulator said. “This can bring benefits including more intense competition, lower costs and faster changes in prices to better match demand and supply in markets.”
A pricing algorithm is a data-driven system that sets or recommends prices based on current and past market data. The CMA said it has outlined how businesses using algorithms can comply with the law.
“We are surprised at the CMA’s interest in a long-standing hotel data analytics and benchmarking platform that for decades has been used by companies and government entities alike to better assess market dynamics,” a CoStar spokesperson told The Times, adding that the company was “happy to provide the CMA with assistance.”
In May 2023, STR filed a motion to dismiss a U.S. lawsuit claiming it and several hotel companies conspired to inflate luxury hotel rates. The firm said the seven plaintiffs failed to show a conspiracy to fix prices through STR’s “Forward STAR” program in violation of federal antitrust laws.
The February lawsuit in federal court in Washington state alleged that STR, owned by CoStar Group and hotel companies including IHG, Marriott and Hyatt Hotels Corp. exchanged “competitively sensitive information about their prices, supply and future plans” in violation of the Sherman Act.
CoStar and other hotels defeated the lawsuit in September, which claimed they shared revenue and other data to keep room prices high, according to Reuters. Robert Lasnik, a Seattle-based U.S. district judge, dismissed the suit, saying the consumers had not shown that CoStar and six hotel operators agreed to share price information illegally. His order allowed the plaintiffs to amend the lawsuit and try again.
In November, the UK Advertising Standards Authority upheld complaints against Hilton Worldwide, Travelodge, Booking.com and Accor over their use of “from” prices. It found few rooms available at the promoted price and concluded the adverts overstated the deals.
