Priceline to Face FTC Action Over Deceptive Hotel Ads, Sources Say

• Guest Reservations has received over 1,000 consumer complaints to the Better Business Bureau, with customers believing they were booking directly with hotels but facing surprise fees and poor customer service
• The potential penalties in the case could exceed $500 million, as the FTC examines whether Guest Reservations' websites violate rules against impersonating other businesses
• FTC Chairman Andrew Ferguson indicated the agency is prioritizing consumer protection cases that address cost-of-living issues, noting that 'tens of millions of Americans' don't notice deceptive practices until after checkout

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 advertisements that mislead consumers into booking through third-party sites rather than directly with hotels, according to sources familiar with the matter.

Key Details

The investigation focuses on Booking's relationship with Guest Reservations, a third-party booking site that advertises hotel stays but often charges higher prices and additional fees than direct hotel bookings. Potential penalties could exceed $500 million.

The FTC is examining whether Guest Reservations violates rules against business impersonation and undisclosed fee practices. Over 1,000 consumer complaints have been filed with the Better Business Bureau, with many customers believing they were booking directly with hotels only to face surprise fees and poor customer service.

Company Response

Booking Holdings disclosed in August that the FTC was considering legal action over disclosures, fees, customer support, and billing practices. The company indicated it is in settlement discussions with the agency. Both Priceline and Guest Reservations declined to comment.

Market Context

Third-party booking sites remain a significant revenue source for major hotel chains including Marriott, Hilton, and InterContinental Hotels Group, despite hotels' preference for direct bookings to avoid commission fees. Industry representatives, including the American Hotel and Lodging Association and Asian American Hotel Owners Association, confirm deceptive third-party booking practices have been a persistent industry problem.

FTC Chairman Andrew Ferguson emphasized consumer protection as a priority, noting these cases deliver faster results than lengthy antitrust investigations. The agency is also considering new rules governing online platform advertising practices.