The European Commission has opened formal proceedings into whether Booking.com may have breached EU internet rules by not assessing or mitigating risks related to fraudulent listings and phishing scams.
According to the Commission, the platform may also have breached Digital Services Act (DSA) rules regarding transparency because it did not clearly label as ads those listings whose providers paid for a higher ranking in search results shown to users.
The Commission says the investigation will focus on the following areas:
- Fraudulent and non-compliant listings on Booking.com
The EU executive will examine whether the provider of Booking.com has properly identified and assessed the systemic risks linked to the dissemination of illegal content. Fake listings, such as for non-existent properties, impersonation fraud, and non-compliant accommodation offers may have negative effects on consumer protection.
The investigation will also assess whether the platform has put in place effective measures to mitigate these risks, including by removing fraudulent and non-compliant listings.
- Phishing scams exploiting Booking.com’s reservation and guest data
The Commission will also investigate whether the provider of Booking.com has diligently assessed and addressed the risks that phishing scams pose to consumers.
In particular, the investigation will focus on risks related to the way reservation and guest data is shared with accommodation providers, and the design and functioning of Booking.com’s messaging service.
The Commission will also examine whether the company has put in place sufficient safeguards to prevent data from being misused to carry out phishing and solicit fraudulent payments.
- Paid-for boosted listings not clearly identifiable as advertisements
The Commission will investigate whether Booking.com complies with the DSA’s advertising transparency obligations.
Accommodation providers can make their listings more visible in Booking.com’s search results by paying a higher commission. Users should be able to clearly recognise that these ‘boosted listings’ are in fact advertisements. The Commission will also examine whether, for each advertisement shown on Booking.com, users can easily see who is behind, who paid for it, why they are seeing it and how they can change the settings that determine which ads they see.
Under the DSA, users are entitled to understand when, and on whose behalf, an ad is shown to them. Without this, they cannot tell whether a listing appears prominently because it matches their search or because the accommodation provider paid for that visibility.
If proven, these failures would constitute infringements of Articles 34 and 35 of the DSA, which oblige Very Large Online Platform and Search Engines to identify, analyse, assess, and mitigate systemic risks; and of Article 26(1), which requires providers of online platforms to ensure that users can clearly identify advertisements and the information about them.
The opening of formal proceedings also empowers the Commission to take further enforcement steps, such as interim measures and non-compliance decisions. The Commission is also empowered to accept commitments offered by Booking.com to remedy the matters subject to the proceedings.
The Commission stresses that opening formal proceedings does not prejudge any final outcome or decision, nor does it impact enforcement actions undertaken by other authorities under other regulatory frameworks.
