Brussels is now focusing on the fraudulent advertisements that the Booking platform may be offering to its customers. Community services have detected possible violations of European legislation on digital services by considering that the company may be favoring scenarios conducive to phishing scams and the dissemination of fraudulent accommodation offers. If the violations are confirmed, the fine could reach up to 6% of its global turnover, which would mean a penalty close to one billion euros.
The community executive will open a procedure to examine whether the company carried out the necessary assessments regarding the risks linked to the dissemination of this type of false advertisements, including those related to non-existent properties. The investigation will also address possible identity fraud and the publication of fictitious accommodation offers. "Booking is not doing enough to mitigate these risks," says a senior community official.
Reservation and advertising data under scrutiny
The procedure will not be limited solely to fraudulent advertisements. The European Commission also wants to examine the risks related to the way reservation and guest data is shared with accommodation providers, as well as the measures taken by the platform to prevent this information from being used for fraudulent purposes.
Alongside this, Brussels will scrutinize the operation of those advertisements whose advertisers pay a higher commission to the company to increase their visibility within the platform.
The goal is to determine whether Booking is complying with the advertising transparency obligations set out in community legislation. In particular, it seeks to ensure that users can easily verify who is behind each advertisement, who has paid for its publication, why they are being shown it, and how they can modify the parameters that determine the advertising they receive.
"We feel that what they have done so far is absolutely deficient," says one of the voices involved in the procedure. The consulted sources remind that, under European legislation, users have the right to "understand when and on whose behalf an advertisement is shown to them."
The opening of this file is the result of a preliminary investigation carried out by community services, which will now proceed with the examination of the possible deficiencies detected on the platform. "Europeans should be able to book their vacations without fear of being scammed," explained this Wednesday the Executive Vice-President of the European Commission responsible for Technological Sovereignty, Henna Virkkunen.
The cases of Madrid, among the background examined by Brussels
The same sources confirm that, in the decision to open this investigation, the latest cases of fraud detected in Madrid have also been taken into account.
Not far from here, in Spain, the Retiro Norte Neighborhood Association and the Organization of Consumers and Users (OCU) have requested a strengthening of controls over advertisements for tourist accommodations after dozens of travelers showed up at a building on Menéndez Pelayo Avenue, in the Madrid district of Retiro, where they found that the establishment they had booked through Booking did not exist.
Neighbors reported the continuous arrival of tourists who, accompanied by their suitcases, were looking for the accommodation they believed they had contracted. In fact, in the images circulated on social media, several signs can be seen, written in Spanish and English and placed at the entrance of the building, warning that the accommodation advertised on Booking is not located in that building.
In other notices, it is specified that it is a property for residential use only, that there is no hotel or hostel, and that no rooms are offered for rent. The messages also urge those affected to report what happened to the platform or to file a complaint with the National Police. For its part, the company assured that it was investigating "the criminal activity" linked to this case and emphasized that it had acted "immediately" to remove the advertisement and prevent more users from being harmed.
Fines of up to 6% of global turnover
The European Commission estimates the impact of problems associated with digital fraud in the European Union at nearly 4 billion euros, a dimension that, in the opinion of community services, reinforces the need to demand greater responsibility from digital platforms in identifying and mitigating these risks.
With this type of procedures, Brussels aims to convey a message to the entire sector about the obligations imposed by European regulations, especially regarding consumer protection, the transparency of advertisements, and the prevention of fraudulent activities. However, the opening of a formal investigation does not prejudge its outcome nor necessarily implies the imposition of a sanction. The community Executive will now have to examine Booking's practices and determine whether the measures adopted by the company are sufficient to meet regulatory requirements.
"It is too early to say whether this will lead to three fines (...). We must also emphasize that, of course, the dialogue with Booking will continue," explains a community official. The Commission thus keeps the dialogue channel open with the platform while advancing in the analysis of possible non-compliances, with the possibility of adopting additional measures if it concludes that the mechanisms for preventing and mitigating risks remain insufficient.