An unusual anti-competition ruling was made by an Istanbul court this week. I am not a judicial person and will not make any comments regarding the court’s decision. However, this idea deserves to be reviewed, especially in terms of its future effects, mainly over Turkey’s struggling tourism and image.
Let’s remember the story. The court on March 29 ordered the suspension of the activities of Booking.com in Turkey, citing accusations of unfair competition, in a lawsuit filed by the Association of Turkish Travel Agencies (TURSAB) in 2015. The website then halted the selling of hotel rooms in Turkey to Turkish users, although it can be used from foreign countries to make reservations for Turkish hotels.
Booking.com also noted it disagrees with the court ruling, adding that it would appeal the decision.
Such competition cases are seen in many sectors across the globe. At the end of thorough probes, businesses are charged with a material fine if they are found guilty. In this vein, the decision to halt a company’s operations for its users in a country seems to be extreme. In the Booking.com case, a slash in the website’s commission prices might have been sought, for instance, according to hoteliers.
Even the officials from Turkey’s Information and Communication Technologies Authority (BTK) voiced their shock over the ruling, noting that the BTK does not have any authority to block any website due to over violations of competition rules.
Second, the decision will not help the country’s tourism sector, which has already been struggling for more than two years due to several reasons, from bomb attacks to a diplomatic crisis with Russia.
The court ruling is expected to mainly hit local tourism and boutique city hotels.
It is a fact that the share of local tourists in Turkey’s tourism revenue is not very high. According to official data, Turkey’s tourism sector creates around 10 percent of the country’s GDP, despite an expected decline over the last few years. While foreign tourists generate around 90 percent of this revenue, local tourists’ share is just around 10 percent.
The inaccessibility of the website could be tolerable from the Turkish users for some sector players, but what will happen to city hotels, especially boutique hotels, which benefit from online portals to take reservations?
According to a sector player, Turkey’s city hotels take around 35 percent of their reservations via websites, with Booking.com taking a large share of this total.
Hoteliers also say that Booking.com is a great platform for them to promote their hotels and to reach new customers, even claiming that the largest amount of sales are made via this website.
Last but not the least, what will happen if the court ruling is seen a leading case for future competition cases? Will every plaintiff ask for the closure of its competitor?