CMA launches investigation into hotel chains

Probe will examine whether hotel chains used a data services provider to share sensitive information.

The Competition and Markets Authority (CMA) has launched an investigation into suspected sharing of competitively sensitive information among competing hotel chains – Hilton, IHG Hotels and Marriott – using the hotel data analytics tool STR, owned by CoStar. All four businesses are under investigation.

Companies use various types of data analytics tools and algorithms to help them make commercial decisions. This can bring benefits including more intense competition, lower costs, and faster changes in prices to better match demand and supply in markets.

However, when rival businesses share competitively sensitive information – including through a third-party data analytics provider – this reduces the uncertainty competing businesses normally have about how each other will act. This can affect how strongly companies compete because it makes it easier for them to predict what each other will do and coordinate their behaviour.

At this stage, no assumptions should be made about whether the law has been broken. Following a period of investigation and information gathering, the CMA may issue a statement of objections if it comes to the provisional view that competition law has been infringed. Further detail of the CMA’s procedures in competition cases is available in its guidance.

Updates to this investigation will be made on the case page.

This investigation reflects the CMA’s wider commitment to ensuring new technologies support fair competition and do not harm consumers. For example, it has set out how businesses using algorithms can stay on the right side of the law.

Notes to editors

1. The competition legislation relevant to the CMA’s investigation is the Competition Act 1998.

2. Information is considered to be “competitively sensitive” when it reduces competitive uncertainty in the market and is capable of influencing the competitive strategy of other businesses.

3. The businesses under investigation are: CoStar, including CoStar UK Limited and its ultimate parent company CoStar Group, Inc.; Hilton, including Hilton Worldwide Limited and its ultimate parent company Hilton Worldwide Holdings Inc.; IHG, including InterContinental Hotels Group Plc.; Marriott, including Marriott Hotels Limited and its ultimate parent company Marriott International, Inc..

4. Under the CMA’s leniency policy, a business that has been involved in cartel activity may be granted immunity from penalties or a significant reduction in penalty in return for reporting the conduct and assisting the CMA with its investigation. Individuals involved in cartel activity may also be granted immunity from criminal prosecution for the cartel offence under the Enterprise Act 2002 and from director disqualification.

5. Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email [email protected]. The CMA operates a rewards policy under which it may pay a financial reward of up to £250,000 in return for information which helps it to identify and take action against illegal cartels. For more information see the CMA’s informant reward policy.

6. The CMA’s case is separate from any other proceedings involving the businesses under investigation, in any jurisdiction.

7. All enquiries from journalists should be directed to the CMA press office by email on [email protected] or by phone on 020 3738 6460.

https://www.gov.uk/government/news/cma-launches-investigation-into-hotel-chains