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Travel Law Update: EU, UK, Asia and Americas14 May 2025

Pricing algorithms in the travel industry

A pricing algorithm is a system that sets or recommends prices based on data about market conditions. Companies often use pricing algorithms to monitor their competitors’ prices and set their own. This may lead to greater competition and reduced costs. However, the use of pricing algorithms also presents legal risks, namely price fixing and collusion.

When competitors use the same pricing algorithm to set prices this may result in the indirect exchange of confidential information: algorithms and automated pricing systems may facilitate collusion (explicit coordination and tacit collusion) and sustain high prices. Algorithms may also be used to enforce anti-competitive restraints to maintain excessive prices.¹ Further, techniques such as reinforcement learning can result in tacit collusion without explicit communication between companies.²

The Competition and Markets Authority (“CMA”) and EU member state national competition authorities have fined companies for breaching competition law by automating re-pricing software to monitor and adjust their prices:

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"Companies should be wary of using a pricing algorithm that is also used by a competitor without confirming that it is run in compliance with competition law."

  • price monitoring algorithms based on software monitors competitors’ pricing: UK Topkins US and GB Eye Trod UK (Amazon UK) CMA investigation – agreement not to undercut prices, implemented via pricing algorithm software to monitor and implement price-fixing (automated repricing software)³;
  • dynamic pricing algorithms based on software automatically set prices based on competitors’ prices: EU Eturas case (Lithuania – travel agents); and
  • personalised pricing algorithm based on software recommends or automatically set prices based on competitors’ prices or Q-learning reinforcement learning algorithms: no case so far. Could the EU or UK regulators find an Infringement without collusion? (Limited by EU Anic Partecipazioni, Hüls and T-Mobile Nederland cases).

Companies should be wary of using a pricing algorithm that is also used by a competitor without confirming that it is run in compliance with competition law: any confidential information uploaded to a pricing software algorithm should be kept strictly confidential and not shared with competition and companies should ensure that any pricing information received is not influenced by confidential information from competitors.

Practices which are illegal offline, such as sharing commercially sensitive information, are also illegal online. Understanding how the algorithms work is key to ensuring legal compliance. Scrutiny over digital markets is expected to increase in the UK and EU under the Digital Markets legislation.

Anti-competitive practices in labour markets

"Practices which are illegal offline, such as sharing commercially sensitive information, are also illegal online."

The CMA and European Commission are increasingly focussing on anti-competitive practices within labour markets. There are three key anti-competitive behaviours:

  • no-poaching agreements – these take various forms, for example no-hire agreements, where employers agree not to hire one another’s employees; and non-solicitation agreements, where employers agree not to approach one another’s employees. The European Commission has ruled that no-poach agreements are “by-object” restrictions under Article 101(1) of the Treaty on the Functioning of the European Union;
  • wage-fixing agreements – companies agree to fix employees’ pay. This is also a “by-object” restriction; and
  • information sharing – sensitive information about the terms and conditions offered to employees is shared between companies.

UK CMA’s action

  • The CMA has indicated in its 2024/2025 Annual Plan that labour markets will be a key focus point.⁴ On 21 March 2025, the CMA issued an infringement decision to five companies regarding the exchange of competitively sensitive information, namely freelancer pay. This was ruled a “by-object” infringement, resulting in £4m in fines.⁵ The CMA is also currently investigating suspected anti-competitive practices, including reciprocal arrangements regarding hiring staff involved in the supply of fragrances.⁶

"The CMA and European Commission are increasingly focusing on anti-competitive practices within labour markets."

EU investigations

  • European Commission November 2023 – ongoing investigation into the online food delivery sector (since November 2023)⁷;
  • the Belgian Competition Authority – on 2 July 2024 imposed a €47m fineon companies for various anti-competitive practices under section 25 of the Competition Act 1998, including price fixing and no-poach agreements. The Belgian Competition Authority stated that no-poach agreements deprive employees of job opportunities and pay increases, thus reducing competition in the downstream market for their services, specifically by limiting capacity⁸;
  • Portuguese competition authority: The Portuguese Competition Authority (AdC) fined three companies a total of €3,092,000 for engaging in anti-competitive practices in the labour market (bilateral no – poach agreements)⁹ following its 2021 reports on labour markets¹⁰;
  • Finnish Competition and Consumer Authority (FCCA) fined the Finnish ice hockey league (Jääkiekon SM-liiga Oy) and hockey clubs a total of 75,000 EUR for no-poach agreement¹¹; and
  • 2024 Joint Nordic Report, Competition and Labour Markets.¹²

Companies are advised not to share sensitive information regarding employees; even informal discussions between travel companies about the cost of employees could be a breach of competition law. It is also important that travel companies offer recruitment staff training to ensure compliance with competition law.

Australia

"Consumer protection organisations and regulators continue to investigate and prosecute online travel insurance providers for misleading or deceiving consumers."

We have previously reported on prosecution of online platforms for misleading and deceptive conduct in relation to travel insurance policies and products offered to Australian consumers [insert link to article on Allianz conviction].  In February 2025, Allianz Australia was fined AU$13.5m (approximately US$8.5m) for misleading and deceptive conduct.  In displaying details of travel insurance policies between February 2016 and June 2018, Allianz failed to disclose critical conditions and limits, notably restrictions on cancellation fees, personal liability and travel expenses reimbursement coverage. Whist the court was satisfied that these omissions were neither intentional or dishonest, the court focused on the effect of these omissions, which were misleading and could have induced consumers to buy the insurance without knowledge of these conditions and limits.

The penalty for such offences was AU$16.8m (approximately US$10.5m). The Court applied a 25% discount because Allianz pleaded guilty to these offences at a relatively early stage in the prosecution.

Key take-aways:
  • consumer protection organisations and regulators continue to investigate and prosecute online travel insurance providers for misleading or deceiving consumers.  The combination of insurance regulation and disclosure requirements and consumer protection powers can often make investigation and prosecution of travel insurance providers a high-profile target; and
  • the terms on which travel insurance offered through online platforms should be reviewed and ensure that responsibility for compliance with insurance and consumer disclosure requirements is clearly delineated.

Malaysia

"The definition of a social media service may apply this registration requirement to a broader range of online platforms."

From 1 January 2025, internet messaging and social media services with more than eight million Malaysian users must obtain an applications service provider class licence. The legislation defines a social media service as one which allows two or more online users to ‘create, upload, share, disseminate or modify’ online content. Whist this legislation appears intended primarily for social media platforms such as Meta, Google and X, the definition of a social media service could include other online platforms.  This would include platforms which allow users to post reviews and content and for other users to be able to respond to and comment on this content.  The current level of registration is relatively low and a number of platforms are understood to have either stated that they do not meet the criteria or that their platforms do not fall within the definition of a social media service. Operating internet messaging or social media services with more than eight million Malaysian users without this licence can result in fines of up to MYR 500,000 (approximately US$113,000) and/or up to five years of imprisonment on conviction.

Key take-aways:
  • the Malaysian Communications and Multimedia Commission will determine the number of Malaysian users;
  • it remains to be seen how it will account for visitors to Malaysia accessing internet messaging and/or social media services whist in Malaysia;
  • the definition of a social media service may apply this registration requirement to a broader range of online platforms; and
  • it is unclear how the penalties will be enforced against platforms without a Malaysian presence.

"Online platforms without a physical presence in Mexico should clarify whether the judgment applies to their operations and transactions involving consumers in Mexico."

Mexico

Earlier this year, the Mexican Supreme Court ruled that mere publication of terms of use on an online platform operating in Mexico does not constitute acceptance of these terms by Mexican consumers and that positive steps to record acceptance of terms and conditions were required.

Key take-aways:
  • online platforms without a physical presence in Mexico should clarify whether the judgment applies to their operations and transactions involving consumers in Mexico;
  • it is unclear how the penalties will be enforced against platforms without a physical presence in Mexico; and
  • platforms which are subject to this ruling should ensure that acceptance of all of their terms and conditions involves a positive step by the user, such as a click-box.

United States

In December 2024, the Federal Trade Commission (FTC) announced a ban on undisclosed and misdescribed fees, known as the ‘Junk Fees Rule’.  The Junk Fees Rule will require that all mandatory fees be disclosed in a transport and accurate way and from at least the point at which prices are displayed.  Prices must also be displayed more prominently than other information on pricing.  The Junk Fees Rule does not prohibit any types of fees or restrict the ability to impose fees.

"Online platforms which offer airline, car rental and accommodation booking and/or price comparison services to US users will need to ensure that their pricing display and disclosure meets these requirements."

This has bipartisan support and key initial targets are the transport and hotels/hospitality sectors. Below are key pricing practices, fees and charges which may affected by the Junk Fees Rule:

  • cleaning, resort, service and hospitality fees and compulsory costs, such as meals on certain holidays, must be disclosed when the price is first displayed and not at or after the reservation or payment stage;
  • the description of each fee must be accurate, transparent and not mislead bookers and generic descriptions such as convenience, service or hospitality fees may be the focus of initial investigations and prosecutions; and
  • airlines and car rental bookings are also likely to be initial targets for investigation to ensure that all mandatory charges are disclosed clearly and transparently and as early in the booking process as possible.

Online platforms which offer airline, car rental and accommodation booking and/or price comparison services to US users will need to ensure that their pricing display and disclosure meets these requirements. Whist the FTC has indicated that it will take an aggressive approach to enforcement, it is unclear whether this approach will remain its position following the appointment of a new FTC Chair by President Trump.

[1]https://www.dice.hhu.de/fileadmin/redaktion/Fakultaeten/Wirtschaftswissenschaftliche_Fakultaet/DICE/Discussion_Paper/300_Hunold_Kesler_Laitenberger.pdf
[2] https://papers.tinbergen.nl/18056.pdf
[3] https://www.gov.uk/cma-cases/online-sales-of-discretionary-consumer-products
[4] https://www.gov.uk/government/publications/cma-annual-plan-2024-to-2025/annual-plan-2024-to-2025
[5]  https://www.gov.uk/cma-cases/suspected-anti-competitive-behaviour-relating-to-freelance-and-employed-labour-in-the-production-creation-and-slash-or-broadcasting-of-television-content-excluding-sport
[6] https://www.gov.uk/cma-cases/suspected-anti-competitive-conduct-in-relation-to-fragrances-and-fragrance-ingredients-51257#:~:text=The%20investigation%20concerns%20suspected%20anti,investigation%20procedures%20in%20CA98%20cases.
[7] IP/23/5944
[8] https://www.claeysengels.be/en-gb/news-events/non-solicitation-employees-belgian-competition-authority-sanctions-no-hire-clauses
[9] https://www.concorrencia.pt/en/articles/adc-fines-inetum-group-anti-competitive-practices-labour-market
[10]https://www.concorrencia.pt/sites/default/files/Issues%20Paper_Labour%20Market%20Agreements%20and%20Competition%20Policy.pdf
[11]https://www.kkv.fi/en/current/press-releases/jokerit-agreement-between-finnish-ice-hockey-league-and-league-teams-in-violation-of-competition-law/
[12]https://www.konkurrensverket.se/globalassets/dokument/informationsmaterial/rapporter-och-broschyrer/nordiska-rapporter/nordic-report_2024_competition-and-labour-markets.pdf

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