The UK competition regulator is to investigate hotel booking websites such as US giant Expedia Inc (NASDAQ:EXPE) over concerns that they do not help people find the best deal and were potentially breaking consumer law.
The Competition and Markets Authority (CMA) said it was concerned about the clarity, accuracy and presentation of information on sites, which could mislead consumers.
Other major hotel booking site operators include Booking.com, which is owned by Priceline Group Inc (NASDAQ:PCLN), Hotels.com, and Germany's Trivago, which is majority owned by Expedia.
The CMA said it would examine how hotels were ranked, for example whether results were influenced by how much commission a hotel pays over the customer's requirements, and the use of pressure selling, such as claims about how many rooms were left.
It also had concerns over the discounts advertised for the rooms and hidden charges, including taxes and booking fees.
Difficult for people to make the right choice
CMA chief executive Andrea Coscelli said around 70% of people looking for a hotel last year used the sites and they should all be confident they were getting a good deal.
"To do this, sites need to give their customers information that is clear, accurate and presented in a way that enables people to choose the best deal for them," he said.
"But we are concerned that this is not happening and that the information on sites may in fact be making it difficult for people to make the right choice."
The news comes as Expedia saw its shares plunge in after-hours trading after the internet travel firm reported third quarter earnings and revenue that missed market expectations.