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Japan antitrust watchdog probes Expedia and Rakuten

Booking.com also investigated for allegedly constraining hotel rates

The three travel websites face administrative penalties if a probe uncovers price-fixing or other violations. (Photo by Masayuki Terazawa)

TOKYO -- Leading travel booking websites Rakuten Travel, Expedia and Booking.com are being investigated in Japan over possible antitrust violations, sources told Nikkei.

The Japan Fair Trade Commission suspects the site operators have been unduly constraining hotel room prices to guarantee cheaper rates. The sites take fees from hotels in return for mediating transactions with customers.

The antitrust act prohibits companies from restricting the businesses of contracting parties. Violations would lead to cease and desist orders, obliging the companies to prevent a recurrence.

According to the sources, site operators Rakuten, Booking.com Japan and Expedia Holdings are alleged to have contractually pressured hotels to allocate more rooms, or to set the same or lower prices compared to other booking websites.

The watchdog will conduct further hearings with the site operators and hotels before deciding whether to impose administrative penalties.

Provisions in commercial contracts that demand one party provide better terms over other competitors are called "most favored nation" clauses.

Amazon Japan was also investigated in August 2016, over allegations that it had constrained the businesses of dealers who sold goods on its e-commerce platform. Amazon offered to review their contracts, and the investigation ended the following year without determining legality.

The Japanese authorities' latest move is part of greater global scrutiny of travel sites.

The Netherlands-based Booking.com has been under pressure from the German Federal Cartel Office, which banned it from using most favored nation clauses in 2015. Antitrust authorities in the U.K. and France have also urged the company to revise its contract terms.

Expedia, too, revised its terms after they caught the attention of the U.K.

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