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Expedia In Hotel Price-Fixing Investigation

(c) Sky News 2012

Britain's competition regulator has claimed that Expedia (NasdaqGS: EXPE - news) , Intercontinental Hotels and have breached competition law over room discounts.

The Office for Fair Trading (OFT) said that online travel agents Expedia and, and Intercontinental Hotels (IHG) signed potentially unlawful deals to limit discounts on rooms.

The provisional view was that all three companies had infringed competition law, the OFT said.

The arrangement between and IHG is still in place, while Expedia allegedly violated rules between October 2007 and September 2010, the OFT added.

Deals have been described as "anti-competitive" because they could limit price competition between online travel agents and hinder agents attempting to gain market share by offering discounts to consumers.

IHG owns over 4,500 hotels, including the Crowne Plaza and Holiday Inn brands.

Although this investigation is focused on IHG, and Expedia, the watchdog warned that the alleged problem could be widespread in the industry.

The UK's online travel agency sector is the largest in Europe (Chicago Options: ^REURUSD - news) , with hotel room revenue amounting to around £10.1bn in 2010, according to the OFT.

OFT chief executive Clive Maxwell said: 'We want people to benefit fully from being able to shop around online and get a better deal from discounters that are prepared to share their commission with customers."

IHG said in a statement that its arrangements with online booking agents were "compliant with competition laws and consistent with the long-standing approach of the global hotel industry".

It said it is co-operating fully with the OFT's investigation, which began in 2010.

The regulator said all parties will now have a full opportunity to respond to its findings before the watchdog decides whether competition law has in fact been infringed.