Multimodal Booking Regulation

Multimodal Booking Regulation

eu travel tech position paper

This paper sets out eu travel tech’s position on the Multimodal Booking Regulation. It covers the display and ranking obligations of Article 7, the treatment of sponsored results, the emissions display obligations of Article 9, the administrative burden the Regulation creates and its enforcement architecture. The article-by-article amendments are set out in the accompanying annex.

It does not cover in-depth the competition-related provisions of the proposal, namely the designation of providers with significant market presence and the conduct obligations that follow, in Articles 4, 5 and 6 and Annex I, and the marketing information data obligation in Article 8. eu travel tech’s position on those provisions is that they should be removed from the proposal in their entirety. The extension of content-sharing and FRAND obligations to dominant air carriers is addressed in-depth in the eu travel tech paper on the Rail Ticketing Regulation.

Executive summary

The Multimodal Booking Regulation adopts a regulatory model designed for airline-owned reservation systems and extends it, with gatekeeper-style additions onto a distribution market that is today competitive, diverse and largely independent of transport carriers. We consider that the proposal, as it stands, should be rejected; it responds to a problem which the evidence does not establish, with obligations aimed at intermediaries that hold no market power while the transport carriers that do hold it evade obligations almost entirely.

Consumer protection: The display rules would make travel search worse for the consumers they are meant to protect. A closed list of default ranking criteria removes the flexibility that lets comparison sites serve different travellers and compete effectively, and harms business models which give room to free consumer search and comparison tools, which also provide carriers with visibility. Genuine display bias is a concern only for operators’ vertically integrated platforms that both rank and sell their own supply of tickets. These provisions duplicate protections that already exist in the Unfair Commercial Practices Directive, the Digital Services Act, the Platform-to-Business Regulation, and the proposed Rail Ticketing Regulation.

Competition: eu travel tech’s initial position is complete removal. The designation regime in Article 4 and Annex I, the conduct obligations in Articles 5 and 6, and the marketing information data obligation in Article 8 are not justified by any market failure the Impact Assessment establishes. These provisions should be deleted. The detailed reasoning, and the amendments that would be required should the co-legislators retain them, are set out in a separate eu travel tech position paper.

eu travel tech key ask:

Ensure search results and displays remain useful to users: replace the closed ranking list and the sponsored results restriction with a high-level prohibition of undisclosed bias and a guarantee of user choice in filtering options.
Remove the competition-related provisions in their entirety: Articles 4, 5 and 6, Annex I and Article 8 are unjustified, disproportionate and not fit for purpose;
Extend the content-sharing and FRAND framework of the Rail Ticketing Regulation to dominant air carriers, so that the balance of rights and obligations is restored for air as it is for rail.

Introduction

This paper sets out eu travel tech’s position on the Multimodal Booking Regulation, notably the neutral display and ranking obligations of Article 7, the treatment of sponsored results, and the emissions display obligations of Article 9. The article-by-article amendments are set out in the accompanying annex.

eu travel tech represents the travel technology sector, including online travel agencies, metasearch engines, travel management companies and global distribution systems. These companies perform the passenger transport search, comparison and combination functionalities which are the Multimodal Booking Regulation’s regulatory target as ‘Multimodal Digital Mobility Services’. Their business model depends on comprehensive, trusted, accurate and attractive presentation of all available options. eu travel tech therefore engages constructively with the modernization of the framework for ticket distribution and welcomes the repeal of Regulation (EC) No 80/2009, a regulatory regime designed in the 1980s for a market of vertically integrated aggregator systems that no longer exist in their original form.

The proposal that is set to replace it, however, does not modernize that framework; it extends it. The Multimodal Booking Regulation takes a regulatory model built for airline-owned aggregators and broadens its application, with gatekeeper-style additions, onto not only a far more competitive and diverse distribution market but also entirely different business models, applying conduct obligations to undertakings whose market power has not been established and, as this paper demonstrates, does not exist. The Regulatory Scrutiny Board twice highlighted this problem: its first opinion on the Impact Assessment was negative, and even its second, positive opinion recorded the reservation that the existence and magnitude of the alleged market failures “are not sufficiently demonstrated”[1]. It also queried the scope, pointing out the inconsistency in including platforms that do not sell tickets even though the alleged market failures relate to ticketing.[2]

Three observations are key. First, the title “Multimodal Booking Regulation” overpromises: nothing in the legislative text creates, mandates or facilitates a single multimodal journey, through-ticketing across modes or technical interoperability, and the regulated services themselves need not be multimodal at all. A service qualifies as a “multimodal” digital mobility service by distributing products of two or more operators in one and the same mode[3]; an air-only online travel agency (“OTA”) is “multimodal” by definition, while no provision requires, facilitates or rewards the actual combination of transport modes. “Multimodal” describes neither a new service to travelers nor even the undertakings being regulated; it is a label without connection to reality. Second, the conduct the proposal targets is already regulated: undisclosed paid ranking is prohibited by the Unfair Commercial Practices Directive (“UCPD”), as the Impact Assessment itself states[4]; ranking transparency is governed by Article 5 of the Platform-to-Business Regulation (“P2BR”) and Article 27 of the Digital Services Act (“DSA”); self-preferencing by vertically integrated rail incumbents is addressed by the proposal for a Rail Ticketing Regulation (“RTR”); and Articles 101 and 102 TFEU remain fully applicable to infringements of EU competition law. The fact that existing law covers the substance of what is proposed here was noted by the Regulatory Scrutiny Board in its opinion, but effectively ignored in the final proposal, which continues to state – incorrectly – that there are ‘no rules governing how results are displayed’. Where the proposal goes beyond this framework, it does not fill gaps; it either duplicates or contradicts existing EU law, replacing transparency-based provisions with prohibitions and pre-empting the effects-based analysis of competition law. Third, and most fundamentally, the proposal regulates the wrong side of the vertical relationship involved in the distribution of transport tickets: it grants new protections to transport operators, including the dominant carriers that competition authorities across Europe have repeatedly found to restrict independent distribution in an abusive fashion.

Overall, eu travel tech considers that the proposal, in its current form, should be rejected by the co-legislators: it addresses a problem that the evidence does not establish, with instruments mismatched to the market it targets. We recognize, however, that the legislative process is under way, and seek to engage constructively to ensure any conclusively adopted Regulation is workable and functioning. The positioning and the article-by-article amendments that follow are offered in that spirit, to set out what would be required to make the Regulation workable should the co-legislators choose to proceed.

This paper sets out eu travel tech’s view on how the Regulation should be rebuilt. Four messages frame the detailed positioning and the article-by-article amendments in the Annex:

Restoring the balance of rights and obligations, above all for air: the proposal hands operators new rights vis-à-vis intermediaries; for railways these are counterbalanced by the content-sharing and FRAND obligations of the RTR, but for airlines no counterpart exists. The content-sharing and FRAND framework of the RTR must be extended to dominant air carriers (Section 2.3)
Regulating market power, not business models: The competition-related provisions of the proposal are not justified and must be removed.
Protecting a useful consumer display: the closed list of default ranking criteria and the quasi-prohibition of sponsored results would make online travel search worse or unavailable for the consumers they claim to protect; they should be replaced by a high-level prohibition of undisclosed bias and guaranteed consumer filtering options. (Sections 5 and 6).
Avoiding a costly enforcement machine for a problem that has not been demonstrated: based on the Commission’s Impact Assessment, the Regulation’s enforcement would cost national authorities EUR 135 million and platforms well over EUR 100 million in the attempt to regulate a market in which only four designations are even expected, in direct conflict with the EU’s simplification and competitiveness agenda (Section 8).

See the full paper below and annex below.