CMA investigates hotel chains for data sharing

The Competition and Markets Authority (CMA) has launched a significant investigation into the suspected sharing of competitively sensitive information among key players in the hotel industry. This inquiry targets major hotel chains, including Hilton, IHG Hotels and Marriott, all of which are accused of potentially utilising the hotel data analytics tool STR, which is owned by CoStar, to exchange sensitive information.

Data analytics tools and algorithms are regularly employed by companies to enhance their commercial decision-making processes. The use of such tools can promote competition, potentially leading to lower costs and quicker adjustments in pricing based on market demand and supply. However, the situation becomes problematic when competing businesses share sensitive information through a third-party service. This type of data sharing can significantly reduce the uncertainty that usually exists between competing firms, enabling them to predict each other's actions with greater ease and coordinate their strategies more effectively.

At present, the CMA has not drawn any conclusions regarding the legality of the actions being examined. The investigation will involve a thorough process of information gathering and analysis. Should the CMA reach a provisional conclusion that competition law has been breached, it may issue a statement of objections outlining its findings. Clarity regarding the CMA's procedures in such competition cases can be found in its published guidance.

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