Trip.com has eradicated the tools at the centre of an anti-trust case lobbed by the Chinese government following a USD $770 million (AU $ 1.1 billion) fine.
Speaking on Monday following the China’s State Administration for Market Regulation (SAMR)’s antitrust ruling, CEO Jane Sun and CFO Xiaofan Wang reportedly said the OTA had got rid of its automated price-checking and price-matching tools, which govern how hotels are distributed across the platform.
The SAMR ruled that Trip.com had abused its position in the Chinese hotel market by using exclusive contracts and technical mechanisms to lock hotels into the platform and enforce ‘lowest price’ terms. This is a violation of China’s Anti-Monopoly Law.
The regulator confiscated RMB 1.66 billion (approximately A$357.5 million) in illegal gains, fined Trip.com RMB 3.52 billion (approximately A$743.6 million), and ordered it to return RMB 122 million (approximately A$25.7 million) in hotel security deposits that it had withheld from hotel operators.
Wang said the removal of the tools and the fine were already impacting the company’s Q2 results.
“We have discontinued our price tracking and automated price matching tools starting in March. Based on what we know today, we believe the impact of those changes has been reflected in our second quarter outlook,” she said.
Revenue for the second quarter puts growth at 3 to 8 per cent, down from the 17 per cent growth it reported in the first quarter.
A new multi-tier partnership framework has been introduced in its place.
Wang cautioned that “we may see some fluctuations in our financial performance.”
Trip.com Group told Travel Weekly: The company has received the decision from the State Administration for Market Regulation (SAMR) of the People’s Republic of China. We fully acknowledge and respect the findings regarding the accommodation business in the Chinese mainland, and will implement the required adjustments in compliance with the guidance provided. We remain focused on our long-term mission to facilitate global travel and drive innovation within the industry, fostering a healthy and sustainable market environment.
