The Competition and Markets Authority is probing whether chains shared commercially sensitive information through data analytics tool run by CoStar, which is also part of investigation
Hotel giants Hilton, Marriott, Holiday Inn owner InterContinental Hotels Group and commercial property data analytics firm CoStar are facing an investigation by the UK’s competition watchdog over suspected sharing of sensitive information.
The Competition and Markets Authority (CMA) is examining whether the international hotel companies exchanged information via CoStar’s data analytics platform STR and so-called algorithms to assist them in making commercial decisions.
CoStar is being investigated as it controls the data platform through which commercially sensitive information may be shared.
The CMA stated that when competitors exchange commercially sensitive information through a data provider, it can enable them to anticipate each other’s actions and to align their behaviour and pricing strategies.
The CMA added: “At this stage, no assumptions should be made about whether the law has been broken.
“Following a period of investigation and information gathering, the CMA may issue a statement of objections if it comes to the provisional view that competition law has been infringed.”
The investigation forms part of the regulator’s drive to ensure emerging technology, such as pricing algorithms, promotes fair competition and is not exploited to disadvantage consumers.
A pricing algorithm is a data-driven system that determines or suggests pricing levels, typically based on current and historical data regarding market conditions. The CMA explained: “Companies use various types of data analytics tools and algorithms to help them make commercial decisions.
“This can bring benefits including more intense competition, lower costs, and faster changes in prices to better match demand and supply in markets.
“However, when rival businesses share competitively sensitive information – including through a third-party data analytics provider – this reduces the uncertainty competing businesses normally have about how each other will act.
“This can affect how strongly companies compete because it makes it easier for them to predict what each other will do and coordinate their behaviour.”
InterContinental Hotels Group (IHG), which features on London’s FTSE 100 Index, witnessed its shares drop 5% on Monday morning, though this also occurred alongside broader market falls triggered by escalating tensions in the Middle East.
An IHG spokesperson confirmed the company would “co-operate fully with the CMA’s inquiries” but refused to comment further.
A CoStar spokesperson indicated the company was “happy to provide the CMA with assistance”.
The firm continued: “We are surprised at the CMA’s interest in a long-standing hotel data analytics and benchmarking platform, that for decades has been used by companies and government entities alike to better assess market dynamics.”
Hilton and Marriott have been contacted for comment.








