The chief competition regulator in the United Kingdom has opened a probe into Marriott International, Hilton and IHG Hotels and Resorts, along with data company CoStar, over whether the companies were sharing data that could potentially harm consumers by making their rates less competitive, Reuters first reported.
The Competition and Markets Authority is the principal competition regulator in the UK and responsible for promoting competitive markets and tackling unfair behavior.
The inquiry is into whether the three hotel chains supplied competitively sensitive data through CoStar’s data analytic tool, which suggests that the company’s could then use to see other company data and fix pricing.
Hotel chains, individual hotel owners and management companies have historically supplied hotel data to companies like CoStar, through its data arm, STR, in order to receive back intel on key performance indicators like average daily rates among broader comp sets. The data, however, and as outlined by companies like CoStar and others in the hotel data collection business, is obfuscated to show only averages and not data specific to one hotel.
CoStar’s guidelines state that a compettive set must include a minimum of four participating properties, not including the subject property. Of the four, there must be a minimum of three properties not affiliated with the subject property. In its guidelines, CoStar also says that it performs isolation checks to ensure individual property data is not isolated from report to report.
“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,” the Competition and Markets Authority said in a statement.
In response, CoStar in a statement said: “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.”
It confirmed that its UK team is cooperating in full with the CMA.
IHG issued a statement saying it had been notified of the investigation into suspected sharing of competitively sensitive information among competing hotel chains and expressed it would cooperate fully with the CMA’s inquiries. “The CMA noted that no assumptions should be made about whether competition law has been infringed,” the statement added.
A Hilton spokesperson told HOTELS that it’s “cooperating fully with the CMA’s inquiries.”
Marriott did not immediately respond to a request for comment.
This is not the first time claims like this have been leveled against CoStar and other hotel chains. Last September, a judge sided with CoStar and six hotel chains, including Hilton, Hyatt and Marriott, to dismiss a lawsuit that claimed they improperly shared data to keep room rates artificially elevated.
The lawsuit alleged that hotels were violating antitrust law by sharing pricing, occupancy, room supply data and other data points allowing them to inflate prices in Washington, D.C., San Francisco, New York, Nashville, Austin and other cities.