COT's Top Four Commercial Issues - July 2018

Welcome to this month's edition of our commercial review. For those of you heading off on summer breaks, we bring you some topical news on hotel booking sites, alongside case law updates on implied terms, reasonableness and basis clauses and a refresher in force majeure clauses.

Enjoy.

CMA enforcement action on hotel booking websites

If you're looking to book a last minute holiday this summer, you are probably familiar with messages telling you to 'Book now! One room left!' on hotel booking sites. This may become a thing of the past, with the Competition and Markets Authority (CMA) launching enforcement action against hotel booking websites late last month.

The CMA opened its investigation into hotel booking websites in October 2017 following concerns that common practices may be breaching consumer law. The CMA was concerned that the clarity, accuracy and presentation of information on sites could be misleading consumers and pressuring them into making uninformed purchasing decisions rather than taking time to find the best deal for them. In particular, the investigation examined:

Search results: the factors behind the ranking of search results and whether those factors were relevant to the customer's requirements; Pressure selling: whether claims about how many people were looking at the same room, how many rooms were left or how long a price will be available for created a misleading impression of room availability or rushed customers into making a booking decision; Discount claims: whether claims about discounts offered customers a fair basis for comparison; and Hidden costs: whether sites included all costs in the price first shown to customers or whether there were hidden costs applied during the booking process. Following its investigation, the CMA announced that it will be taking enforcement action against booking sites to address its concerns that some are breaking consumer protection laws, either by securing legally binding commitments that those sites concerned will change their business practices or, if necessary, taking them to court. Some cases have been referred to the Advertising Standards Authority for further investigation into misleading statements like "best price guarantee" and the CMA has also sent warning letters to sites, demanding that they review their terms and practices for fairness and compliance with consumer protection law.

To avoid falling foul of consumer protection laws, businesses should keep in mind the following:

Under the Consumer Protection from Unfair Trading Regulations 2008, an action is considered to be misleading if the overall presentation of information in any way deceives or is likely to deceive the average consumer about the existence or nature of the product, the nature of the sales process or the price and the manner in which the price is calculated (even if that that information is factually correct), and it causes or is likely to cause the average customer to enter into a transaction which it wouldn't have taken otherwise; Any commercial practice that omits or hides...