Hotel chains and data firm under investigation over possible information sharing
Hilton, Holiday Inn owner InterContinental Hotels Group and Marriott, as well as data analytics firm CoStar are being probed by the CMA.
Hotel chains Hilton, Marriott, Holiday Inn owner InterContinental Hotels Group and commercial property data analytics firm CoStar are under investigation by the UK competition watchdog over suspected sharing of sensitive information.
The Competition and Markets Authority (CMA) is looking into whether the global hotel firms shared information through the use of CoStar’s data analytics tool STR and so-called algorithms to help them make commercial decisions.
CoStar is under investigation as it owns the data tool through which competitively sensitive information can be shared.
The CMA said that when rivals share competitively sensitive information through a data provider it can allow them to predict what each other will do and to co-ordinate they behaviour and pricing.
The CMA said: “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.”
The probe comes as part of the regulator’s push to ensure new technology, such as pricing algorithms, supports fair competition and is not misused to harm consumers.
A pricing algorithm is a data-led system that sets or recommends pricing levels, usually based on current and past data about market conditions.
The CMA said: “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.”
InterContinental Hotels Group (IHG), which is listed on London’s FTSE 100 Index, saw its shares fall 5% on Monday morning, although this also came amid wider declines on the stock market due to the intensifying conflict in the Middle East.
An IHG spokesperson said the group would “co-operate fully with the CMA’s inquiries” but declined to comment further.
A CoStar spokesperson said the firm was “happy to provide the CMA with assistance”.
The firm added: “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.”
Hilton and Marriott have been approached for comment.
