Why the Priceline plan to buy Kayak should be investigated by regulators

NB: This is a viewpoint from Dorian Harris, founder of hotel booking site Skoosh.

A UK competition regulator, The Office of Fair Trading (OFT), is being kept busy in the travel space right now.

One division is acting on my own complaint that online travel agencies are conspiring to preclude price competition through the enforcement of uniform pricing or “rate parity”, and another is looking into the $1.8 billion acquisition of US price comparison site Kayak by the hotel industry giant, Priceline.

I have written to object to that, too.

The notion of a major OTA owning a price comparison site is not, in itself, a concern. It happens in other industries – GoCompare and Confused.com, two of the leading price UK comparison sites for insurance, are owned by the insurance companies, Esure and Admiral respectively.

Travel angle

Though this gives these insurers real time access to their competitors prices, the expectation would be that they’ll use this information to compete and undercut. With Priceline’s access to its competitors prices on Kayak, I have no such expectation.

Used negatively, the ownership of technology can pose a major threat to the public. In 2010 Kayak became a leading proponent of FairSearch, an organisation set up to challenge Google’s acquisition of ITA Software, the system which underpins many flight search providers.

Its charge is this:

When search providers engage in search discrimination – manipulating search results to promote a favored product and demote competitors – consumers pay the price.

It’s a reasonable concern and it could happen but I’m not overly troubled because Google’s modus operandi has always been to display the best search results. If it fails in that it opens the doors to competition.

Priceline’s proposed acquisition of Kayak, on the other hand, poses a very real threat because both companies are already using technology to, in my view, manipulate search results and therefore both fall a long way short of transparent.

Kayak merely gives the illusion that it offers visitors a cross-section of competitors. As a starting point, take the fact that two companies are auto-checked in the initial hotel search on Kayak.

They are Expedia and Hotels.com and beside them a note says: “Choose Sites to Compare”.

But the sites are already chosen and there’s nothing to compare. It is unlikely that many of the travelling public would know that Expedia and Hotels.com are one and the same company. Nor that, as adherents to rate parity, they also have the same selling prices.

Beyond that there is precious little competition in the hotel space on Kayak. For any search, typically around ten companies populate the results. Among them you’ll find Expedia, Hotels.com and Venere. The same company and the same prices.

And, leading the list each time, Kayak, almost acting as an OTA in its own right. Despite Kayak’s stated concerns that Google might engage in “search discrimination” should it acquire ITA, Kayak always lists itself first, irrespective of whether it has the best deal. And Kayak’s prices themselves are often fed by none other than Expedia.

It gets worse. Whenever a hotel appearing in Kayak’s search results is part of a chain, some OTAs and the hotel will have agreed non-compete or “rate parity” clauses so the hotel has the same price as the agencies.

Again, I expect few consumers are aware of any of this. Nor whether they’re aware that there is significantly more choice available if they jumped across to Kayak’s competitors outside the US, Hotelscombined or Trivago, for example, where the range of competitors is more than double and the range of offers is far wider.

Expedia, it is worth saying, has just completed a $632 million investment in Trivago.


For all that, it was not Kayak’s apparent lack of transparency at the root of my complaint. Rather it was that online travel agencies already use Kayak and other price comparison sites to police rate disparities.

Where they see parity rates not being upheld, they cut and paste the offending supplier and rate details into emails and send them to hotels demanding their removal from Kayak. If the hotels don’t act or they don’t act fast enough they are threatened with poor placements on the OTAs or, worse, a de-listing.

If Priceline was buy Kayak, my concern is that Priceline’s worldwide cottage industry of rate parity monitors would evolve into a largely automated process, price disparities picked up and dealt with in real time.

The threats made against small OTAs, such as my own, Skoosh, already a daily occurrence, would shoot up to an unprecedented level.

There was a time that sections of the industry would turn on me and say Skoosh should be observing rate parity anyway. The OFT so far disagrees. As do the Swiss and German competition authorities.

And the 31 States in the US in which class actions have been brought against online travel agencies (using our evidence). And now Norway, where every major hotel chain has terminated contracts with a leading OTA for its insistence on rate parity.

Maybe the ITA flight technology is too important to be in the hands of one major company. Maybe there are opportunities for abuse. Kayak is right to at least forward its concerns to the competition authorities.

But Priceline’s influence in the hotel space is no mere speculation, it is very much happening, and the thought of it acquiring Kayak, the only significant price comparison site in the US, with eyes of a major overseas expansion, is a step too far.

I, for one, will not watch it slip through unchallenged.

NB: This is a viewpoint from Dorian Harris, founder of hotel booking site Skoosh.

NB2: Detective image via Shutterstock.

Share on FacebookTweet about this on TwitterShare on LinkedInEmail to someone

About the Writer :: Viewpoints

A founding principle of tnooz was a diversity of viewpoints from across the spectrum. Viewpoints are articles by guest contributors from around the travel and hospitality industries. The views expressed are those of the author. and do not necessarily reflect those of the author's employer, or tnooz and its partners.



Your email address will not be published. Required fields are marked *

  1. Kettle? This is the pot calling...

    I wholeheartedly agree with the above sentiments that the issue is less about Kayak doing anything unseemly, but their obnoxious hypocrisy in trying to call Google out on supposedly being anti-competitive while simultaneously engaging in behavior that’s significantly more anti-competitive than anything Google is doing with ITA Software.

    • John Pope

      Warning * The following brain download is not for a Politically Correct or TL;DR audience *

      Note: I debated publishing this but have since been inspired by Google’s most recent attempt at usurping global privacy rights (http://stopthecyborgs.org/about/), at the whim of its renegade founders.


      Pot v. Kettle,

      Although I may agree with you on the irony of the hypocrisy being displayed by Kayak’s brain trust, given their participation in Fairsearch and pending sale to Priceline, I must vehemently disagree with the magnitude and accuracy of your comparison to Google.

      One could just as easily argue that Kayak is acting both prudentially and legally based on their fiduciary duty (best interest of shareholders) to both participate in the lobbying consortium, and attempt to maximise shareholder value by joining Priceline. Not surprising considering the very real potential threat Google poses to their financial well being, and long-term survival.

      However, Priceline / Booking.com’s heavy handed tactics in:
      a) being an Enforcer-in-Chief regarding Skoosh’s rate parity (price-fixing) infractions, and
      b) being an Influencer-in-Chief in having Skoosh removed from Kayak’s meta-search results
      is a bit rich and ethically questionable, to say the least. But again, this can also be attributed to the Priceline executive branch’s fiduciary obligations.

      On the other hand, Jeffery Boyd, et al.’s quest for power and supremacy in the travel sector pales in comparison to Larry Page’s bloodthirsty appetite for world domination. It’s like saying Boris Johnson’s (London’s Mayor) political aspirations are greater, or more “obnoxious”, than Napoleon’s desire to rule all of Europe.

      The level and degree of hegemony Google engages in – and, I’m sure, wishes it could further impose their will upon – hasn’t been seen since the early days of Genghis Khan or the feudal lords of medieval times. (Ok, I’ll admit, that’s a wee bit hyperbolic – but you get the picture)

      Seriously, if Google thought they could ram it through the regulatory agencies, on either side of the pond, they would have already acquired Kayak, Trivago, Tripadvisor and Yelp – or any other prominent vertical search property that could help extract a greater percentage of the industry’s value chain – a long time ago. Not to mention all the other incumbent technologies that could complete the vertical integration of the industry’s distribution infrastructure. Fortunately, the travel industry is so complex and deeply entrenched with legacy technology, that it’s difficult to even contemplate consolidation of the sector, at this point – even for Google. The regulators, and a limited few remaining industry behemoths, are CURRENTLY the only other natural defenses standing between consumers, an overly-fragmented supplier network, and Google’s warped sense of commercial and competitive ethics. As Stan Lee once coined, “with great power, comes great responsibility” – Google has already demonstrated repeatedly its failure to act responsibly or ethically.

      Additionally, It is still early days to properly judge the ultimate outcome of the ITA acquisition; so commenting on Google’s intentions is still very much premature. If past deeds are any indication, though, we can probably assume the ‘writing on the wall’ will not be too friendly to either competition advocates, ITA’s current clients, or any of Google’s adversaries.

      I submit there is sufficient evidence to suggest that Larry Page is as close to a digital age megalomaniac as one could imagine. It’s quite possible he genuinely believes he (via Google) is the ‘chosen one’, and rightful heir apparent to dramatically influence, if not determine, mankind’s future relationship with digital technology. I, for one, don’t believe he’s smart enough, ethical enough or certainly wise enough, to ascend to the throne and realise that level of power – no one person, or company, is capable of occupying such a perch alone.

      Nor does it also appear the burgeoning digital oligarchy that exists in Silicon Valley today is self-aware enough to fully understand the implications of its increasing influence, ubiquity and impact on billions of people around the world; at least based on today’s economically imperial structures and the narrow set of incentives – namely power, celebrity, influence and tremendous riches – that they’ve adopted and which dominate the Valley culture (a.k.a. arrogance).

      In all cases above, however, one could argue it ultimately comes down to a matter of “don’t hate the players – hate the game.” The ‘players’ are merely soldiers in a battle to do what the rules of the game say they must – win at all costs. Alas, the rules don’t also state you MUST be fair, integral or ethical when playing – only that you must win. It’s a cultural precedent epitomised by recent Wall Street mindsets, which encourages and celebrates concentration of power, and disproportionately rewards Type A personalities (the executive and investment class) rather than Type B archetypes (artists, designers, writers, photographers, videographers and creative problem solvers).

      History has shown us repeatedly that it is the Type B, right brain, creative class who consistently create meaningful value in the world and, subsequently, move the human race forward – Einstein, Da Vinci, Plato, Seneca, Shakespeare, Emerson, Twain, Edison, Jefferson, Tesla, Jobs, Musk, etc. etc. etc. – and not overly aggressive Type A mentalities.

      I believe it’s time once again to literally pay homage to the creative class, and appropriately reward more than just the few successful outliers (e.g. Jobs & Musk) for their considerable contribution to the future digital economy; in addition to more widely distributing the tremendous amount of wealth being created, in general.

      Too many billionaires + too many poor + too few creative middle class = time for change

      Unfortunately, utopian outcomes on a mass scale in this particular chapter of the human experience will likely remain as elusive as unicorns and leprechauns. But the conversation and its righteous intentions should still take place and gradually become part of our collective consciousness.

      Fortunately, new troops are on their way to fight the good fight. For a preview of what those future digital warriors may look like, think Wayne Enterprises from the epic Batman tales, or, if you’d prefer a real world virtuous example, think Kickstarter.

      We’ve coined this coming era and future vision of a digital economy, DIGITAL RENAISSANCE 2.0, and its wider impact on society RENAISSANCE CAPITALISM.

      On a lighter note, how good is Jonny Lee Miller’s portrayal of Holmes in Elementary?

      Told you I was back. 😉

  2. Miramon

    Well, at least Priceline probably doesn’t have to worry about Google lobbying against the purchase. it would be funny if Barry Diller or MS did, though.

  3. Daniele Beccari

    The catch is that everything mentioned here can be achieved with much less than $1.8B.

    • John Pope


      Perhaps “everything mentioned here can be achieved with much less than $1.8B”, from a technology, and, theoretically, a marketing spend perspective.

      However, it certainly cannot be achieved from a brand equity (awareness), brand trust, or most importantly, the amount of time it would take to reach both – debatable whether or not Priceline or Booking could ever reach a similar level of equity and trust, given Google, and its resources, have just recently entered the game.

      Priceline paid a significant premium to expedite the process, and in the hope of heading Google off at the pass.

      Me thinks Dorian raises very legitimate points on the hypocrisy of Priceline’s and Expedia’s recent trumpeting of the ‘anti-competitive’ horn. You have to give Dorian credit for standing up for the principles he believes in, regardless of the commercial roots of his fight – the man definitely has cojones.

      P.S. the anonymous ‘traveler of time and space’ may not be an actual ‘weasel’ but he/she sure is acting like one here. The medium is the message, after all – your fear of transparency tells any audience worth its salt everything they need to know about your opinion – it’s worthless.

      P.S.S. I’m back.

      • Kevin May

        Kevin May

        @john – uh-oh, you’re back!!

        [Glad to see you back, John – hope you’re well]

        • John Pope

          Mostly back – the meds allow for intermittent lucidity.

          Nice to be back, Kev, 🙂

      • Daniele Beccari

        we agree. This concerns highlighted in this post are less about “brand equity and trust” but about “a largely automated process, price disparities picked up and dealt with in real time.”. You don’t need to buy Kayak for this goal.

        • John Pope


          Fair point. Far be it from me to challenge your sagacity – you’ve probably already forgot more than I will ever know on the subject. My feisty sentiment is just consistent with my modus operandi, and a result of a misspent youth. 😉

          My intent was not so much to disagree with your analysis, but more to expand upon it – as well as to hopefully further stimulate, what should be, a very important and highly relevant topic to most in the Tnooz audience.

          And yes, I do find myself nodding with most of your views.

  4. really

    Interesting for Dorian to comment on transparency when the reason he fears both rate shopping and parity is that his site takes rates not meant for onward distribution at retail price points and publishes them as such. He loses access to the rates when the end hotel supplier finds what he is up to.

    • Dorian

      Really really? I lose access to hotels when they are pressurised into cutting me off by their preferred partners – my competitors.

  5. traveler of time and space

    This guy sounds awfully like a bitter ex-boyfriend who got dumped by his sweetheart and can’t move on from the past…Tnooz, why do you post this drivel? Are you having issues retaining bloggers?



    • Kevin May

      Kevin May

      @anonymous (traveler of time and space)…

      We like to air viewpoints from all sides, NOTHING wrong with that as a media brand. Dorian’s opinion might not chime with everyone, but it deserves to be heard.

      As would a similar viewpoint from someone within the companies which he talks about in this article…

      All opinions welcome on Tnooz.

      As for Dorian’s relationship status, he’ll have to answer for himself :).

      Not sure I understand our comment regarding retaining bloggers, sorry. Perhaps the wit is lost in translation (i.e. in comment form).

      • traveler of time and space

        I couldn’t agree more Kevin, we must always hear not only both sides but all sides 🙂
        Have you reached out to kayak? It would be great to hear from them…

        • Kevin May

          Kevin May


          given that the deal has yet to close, because of the investigation, it is unlikely that Kayak will comment on this story.

          still, i have asked.

    • fiona

      Thanks for the links. Looks like this is a long-running issue for Skoosh and the PCLN/KYAK acquisition provides yet another forum.

      • Dorian

        To its credit, the O.F.T. doesn’t respond well to the bitter and twisted. They’re sticklers for facts.

        And it would be great if you didn’t post anonymously on an issue that concerns transparency.

    • Dorian

      God ‘time and space’, you’re not Emma are you? Meredith? I miss you both so much.

  6. Yann Ngongang

    Great points Dorian!

    One minute, Kayak complains about the unfairness of Google’s ITA acquisition, and the next minute it runs into Priceline’s arm. I’m a regular Kayak user, and I’ve noticed since the acquisition that Expedia’s results and links on Kayak are consistently pushed to the bottom of the list.

    If Kayak were a media publication (they are a media company), they would have to disclose on every search, the conflict of interest they have when showing Priceline/Booking.com prices….

  7. fiona

    I am pretty certain that Skoosh at one point was a booking option on kayak – is this still the case?


Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel