Kristóf Szatmáry, Fidesz Member of Parliament, announced that the governing party will propose an amendment to the law in the wake of the Booking.com money withholding scandal, Hungarian news site Magyar Nemzet reports.
As reported earlier by Hungary Today, a payment disruption caused large sums of money to be withheld from Hungarian accommodation providers using Booking.com during the summer. Although the service provider had justified the delay citing maintenance, it still failed to transfer the money to the accommodation providers by the deadline. As a result, the Hungarian Competition Authority opened a complaint procedure against them and on August 24 launched an accelerated sector inquiry. According to market information received by the body, the company’s contractual terms and business practices caused significant disruption to the business of a number of domestic accommodation providers.
Although it was reported in mid-August that the company had already paid off almost all its debts, this did not calm the mood.
This week it emerged that the Competition Authority had raidedBooking.com‘s Budapest office.
The authority has issued an official statement saying that it is still collecting data and will soon find out whether the Dutch accommodation provider’s contracting practices have led to a breach of free competition in the online accommodation booking market.
Booking.com‘s headquarters in Amsterdam. Photo: Wikipedia
Booking.com‘s debts to Hungarian businesses could have been tens of billions of forints, Fidesz MP Kristóf Szatmáry told Magyar Nemzet. He added that discussions have begun on what legislative amendments might be necessary in the case.
By the end of August, thanks to the decisive action of the government and the legislature, 98-99 percent of Hungarian businesses received the fees owed by Booking.com,”
the politician stated. He said that there was no problem anymore at the systemic level and that investigations were ongoing in the outstanding cases.
Almost one in two of the domestic businesses that used Booking.com as a payment method were affected by delays in receiving their money.
Some had delays of a few weeks, but there were thousands of businesses that had not been paid by the Dutch provider for months, causing liquidity problems in many places.
The politician pointed out that at the beginning of August, Booking.com‘s debts to domestic businesses could have been tens of billions of forints.
The Hungarian Competition Authority already finedBooking.com in 2020, for 2.5 billion forints (EUR 6.4 million), for unfair business practices. The authority said then that the Dutch provider had falsely advertised “free cancellation” of commercial accommodations and had used “aggressive” sales techniques to put “psychological pressure” on would-be customers.
“The Fidesz parliamentary group will propose certain amendments to the law in the interest of Hungarian small and medium-sized enterprises to prevent such a situation from arising again. Within the group and with various organizations, we have started to discuss what amendments to the law might be necessary to prevent such a case from occurring in the future, not only at Booking.com, but elsewhere as well,” Kristóf Szatmáry underlined.
The politician added that they are examining whether it is possible to regulate, within the EU legal framework, the failure of companies with a significant market share to maintain customer service in Hungary.
The problem, he said, was that the general terms and conditions contained unilateral clauses from which operators could not derogate. “We are investigating whether there should be a state body that validates the general terms and conditions of such large companies, and in the interests of domestic entrepreneurs, says that distorted terms and conditions cannot be drafted,” the Fidesz politician added. He claimed that they would also look into the possibility of setting up a compensation fund for accommodation intermediaries, similar to that of travel agencies, to which entrepreneurs could turn with their claims.