Priceline to face FTC action over deceptive hotel ads, sources say

• The FTC is investigating whether Guest Reservations' websites violate rules against impersonating other businesses, with the site receiving over 1,000 consumer complaints to the Better Business Bureau about surprise fees and misleading bookings
• Booking Holdings disclosed in August that the FTC was considering legal action over disclosures, fees, customer support and billing practices, and the company is in talks to resolve the matter
• Third-party booking confusion has been a persistent industry problem, with major hotel chains preferring direct bookings to avoid commissions while still relying heavily on aggregators like Booking and Expedia for business

Summary: FTC Targets Priceline Over Deceptive Hotel Booking Ads

The U.S. Federal Trade Commission is preparing enforcement action against Booking Holdings' Priceline over deceptive online advertising practices. The case centers on ads that appear to direct consumers to hotel websites but actually redirect them to third-party sites charging higher prices and additional fees.

Key Details

• Potential penalties: Exceeding $500 million
• Third-party involved: Guest Reservations, which receives hotel inventory from Priceline Partner Solutions
• Consumer complaints: Over 1,000 filed with the Better Business Bureau, citing surprise fees and poor customer service
• Disclosure: Booking Holdings revealed the FTC investigation in August but didn't name the affiliate

Violations Under Review

The FTC is examining whether Guest Reservations' websites violate rules against:

• Impersonating other businesses
• Misleading fee disclosures
• Deceptive billing and customer support practices

Market Context

Third-party booking sites like Booking Holdings and Expedia Group represent major revenue sources for hotel chains including Marriott, Hilton, and InterContinental Hotels Group, despite charging commissions and transaction fees. Major hotel chains have long encouraged direct bookings to avoid intermediary costs.

Industry representatives, including the Asian American Hotel Owners Association CEO, confirm the confusion is widespread, with hotel staff often handling complaints from guests who unknowingly booked through third parties.

Regulatory Focus

FTC Chairman Andrew Ferguson emphasized the agency's focus on consumer protection issues affecting living costs, particularly as Americans face economic pressures. Ferguson noted consumer protection cases deliver faster results than lengthy antitrust investigations, making them a priority tool for addressing tech platform concerns.