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
-
The competition legislation relevant to the CMA's
investigation is the Competition Act 1998.
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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.
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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..
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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.
