Duff on Hospitality Law

This week’s OTA & Travel Distribution Update for the week ending May 18, 2018, is below. This week’s Update features our fourth installment in our 6-part series on alleged anti-trust abuses by hoteliers arising from their keyword practices and a variety of other stories covering nearly all of our usual areas of focus. I hope you enjoy.

Keyword Restrictions – Part IV: The Consumer Benefits of Keyword Restrictions
("Keyword Restrictions - Part IV: The Benefits of Restrictions on Use of Hotel Trademarks, GSB Client Alert, May 18, 2018)
In the fourth installment of our six-part series critiquing recent articles (and litigation) questioning hoteliers’ keyword practices, Don examines the effect of hoteliers’ keyword practices on inter-brand competition – a key factor in evaluating the plaintiffs’ class action claims. According to Don, allowing OTAs free reign to use (abuse) hoteliers’ trademarks undermines hoteliers’ goals of product differentiation and cost containment – both of which are of critical importance to consumers.      

Our weekly client OTA & Travel Distribution Update for the week ending May 11, 2018 is below. This week’s Update features a variety of stories, including the third installment in our six-part series dissecting recent anti-trust allegations against hoteliers arising out of their keyword activities. I hope you enjoy.

Keyword Restrictions – Part III:  Vertical vs. Horizontal Restraints on Trade
("Keyword Restrictions - Part III: Vertical vs. Horizontal," GSB Client Update, May 11, 2018)
In the third installment of our six-part series critiquing recent articles (and litigation) questioning hoteliers’ keyword practices, my colleague, Don Scaramastra, next examines the critical difference between alleged agreements among hotel companies regarding their use of keywords (horizontal) versus agreements between hotel companies and their various downstream distribution channels (vertical).  

My OTA & Travel Distribution Update for the week ending Friday, May 4, 2018 is below. Not a lot of news this week, hence the abbreviated Update.

AHLA: $5.2 Billion Spent in Fraudulent and Misleading Hotel Bookings
Hotel Business - News, May 3, 2018
New research from the American Hotel & Lodging Association (AHLA) suggests that online booking scams and fraudulent and misleading travel websites and companies continue to mislead and confuse consumers.

This week’s OTA & Travel Distribution Update for the week ending April 27, 2018 is below. This week’s Update features a wide variety of stories. I hope you enjoy.

Keyword Restrictions – Part II:  1-800 Contacts Case
("Keyword Restrictions - Part II: Complaints Based on the 1-800 Contacts Case: Visionary or Near Sighted," GSB Newsroom, April 27, 2018)
In the second installment of our six-part series critiquing recent articles (and litigation) questioning hoteliers’ keyword practices, Don Scaramastra next takes a close look at the FTC’s administrative proceeding against online contact retailer, 1-800 Contacts, and whether the proceeding – as frequently asserted – prohibits hoteliers from seeking to restrict distributors’ use of hoteliers’ keywords. Putting aside the much publicized anti-trust litigation against hoteliers, we’ve seen increasing use of the 1-800 Contacts case by wholesalers and distributors as authority for refusing requested keyword protections and/or ceasing trademark abuses.

It’s estimated that room poaching results in upwards of $1.3 billion in lost revenue for hotels and lost funds for consumers every year. As hotels and consumers look for a way to fight against these losses, trademark infringement may be emerging as the most effective tool.

Room poaching occurs when companies position themselves as an event’s housing bureau in order to entice attendees to unwittingly book rooms outside of the official room block. Fake or out-of-block reservations can result in lost reservation fees for hotels, surprise charges and inconvenient and expensive last minute re-booking at alternative hotels for consumers. Further, trademark infringement can erode brand equity and good will between partnering hotels and groups.

Our weekly client OTA & Travel Distribution Update for the week ending April 20, 2018 is below. This week’s Update features a number of stories on the emerging tours and activities space. I also included the first installment of our own detailed look at recent complaints (and now litigation) raised against hoteliers regarding their keyword contracting practices. A huge thanks to my colleague, Don Scaramastra, for digging into this much-publicized anti-trust issue.

Keyword Restrictions:  What Exactly Is the Problem?
("Keyword Restrictions Part I: Restrictions on Keyword Advertising by OTAs: What Exactly Is the Problem?", GSB Client Update, April 20, 2018)
In the first installment of our six-part series critiquing recent articles (and litigation) questioning hoteliers’ keyword practices, my colleague, Don Scaramastra, attempts to define the “problem.” We hope you enjoy.

Australian Authorities Confirm Renewed Interest in Parity Provisions
("Online Booking Clauses Still Cause for Concern for Australian Competition Authority," MLex, April 11, 2018) (subscription required)
Speaking at the ABA’s Antitrust Law 2018 Spring Meeting in Washington D.C. last week, commissioner Roger Featherstone of Australia’s Competition and Consumer Commission (ACCC) confirmed that the regulator is re-examining the previously adopted “narrow” approach to parity in Australia. Featherstone’s comments come only weeks after we first reported that the ACCC was re-considering its previously announced position.

This week’s OTA & Travel Distribution Update for the week ending April 6, 2018 is below. A variety of stories are featured in this week’s Update, including an interesting follow up story on Red Lion’s somewhat unique (and hard to understand) approach to loyalty. I hope you enjoy.

Price-Fixing Fines Imposed Against FlightCentre
("Flight Centre’s $9 million fine renews Australian tensions over court-set antitrust penalties," MLex, April 4, 2018) (subscription required)
Some time ago we featured a series of stories about the somewhat unprecedented approach by the Australian Competition & Consumer Commission (ACCC) to rate parity commitments found in contracts between several international airlines and their distributor, FlightCentre. You might recall that the commitments were found by the ACCC to violate Australian anti-trust laws because the parties were determined to be “competitors” and not principals / agents as argued by the airlines and FlightCentre. This past week, the Australian Federal Court finally concluded the matter by imposing fines of $9.25 million against FlightCentre.

This week’s OTA & Travel Distribution Update for the week ending March 30, 2018 is below. This week’s Update features a heavy dose of OTA updates.

Brazilian Anti-trust Authorities Adopt Narrow Approach to Rate Parity
("Booking Sites Agree To Nix Hotel Pricing Limits In Brazil," Law360 - Technology, March 29, 2018) (subscription required)
Just as we reported last week that Australian competition authorities were re-thinking the previously adopted “narrow” approach to parity, another country signs on to the same approach. Last week, the Brazilian Administrative Council for Economic Defense (CADE) announced that it had reached agreement with Booking.com and Expedia to limit their use of so-called broad rate parity and instead impose only narrow rate parity. According to announcement, the settlement agreement is expected to increase competition in the online travel sector benefitting both hotels and consumer. Someone might want to share with the CADE authorities the results of the investigation conducted last year by the UK’s Competition and Markets Authority (which concluded, among other things, that hoteliers were generally unaware of (or afraid to use) the pricing opportunities afforded under narrow parity) or the basis of the Australian authorities’ conclusion that narrow parity was ineffective in trying to improve competition.

Just when it seemed that service charges were all the rage, tip pooling has reemerged to grab the headlines. Making the rounds from courts to agencies, and now Congress, the issue appears to have been settled by Congress that employers can impose mandatory tip pooling to include certain non-tipped employees.

Can Non-Tipped Employees Participate in the Mandatory Tip Pool?

Under the Fair Labor Standards Act (the “FLSA”), employees who are customarily and regularly tipped can be required to participate in a mandatory tip pool. Under a tip pooling approach, the employer directs tipped employees to combine their tips, and the employer determines a structure for redistributing the tips among the employees in the tip pool. As we have reviewed previously in this blog, employees in tipped positions have challenged mandatory tip pools that include non-tipped employees, such as dishwashers and cooks, asserting that they violate the FLSA. Because those employees are not customarily and regularly tipped, the argument was not without merit as the law has always made clear that tips are the property of the employees to whom customers given them. However, the law also provided that tip pools may be imposed by employers. The FLSA further allowed that employers may claim a tip credit against the federal minimum wage.