CMA reviews relevance of three travel ‘remedies’

The Competition and Markets Authority launched a consultation on removing regulations or ‘remedies’ affecting markets dating back more than 20 years on Monday January 19, including three imposed on travel.

The consultation forms part of a regulatory review of 33 measures imposed “to fix competition problems” identified by predecessors of the CMA – the Competition Commission and Office of Fair Trading, both of which the CMA replaced in 2014.

The orders relating to travel are:

• The Restriction on Agreements and Conduct (Tour Operators) Order 1987, which outlawed ‘resale price maintenance’ in the sale of overseas package holidays, preventing tour operators from stopping agents offering discounts or “inducements to customers”. This made it unlawful for an operator to withhold holidays from sale by an agent or to give “any preference” to agents “who do not offer inducements” or offer these “only to a limited extent”.
• The Foreign Package Holidays (Tour Operators and Travel Agents) Order 2000, which ensured “customers are aware of who owns the travel agent or tour operator” they deal with. This was relevant at a time when there were more large integrated travel groups owning tour operators, airlines and agencies that often traded under different names. It required, among other provisions, the name of the travel group as well as the agent to be prominently displayed on the front of retail premises and brochures and in adverts.
• The Foreign Package Holidays (Tour Operators and Travel Agents) Order 2001, which prevents operators and agents from tying travel insurance to the sale of holidays. This was introduced at a time many agents sold travel insurance before current regulatory restrictions were introduced. It prevented discounts to customers who took out insurance on a holiday.

The CMA noted the ‘remedies’ related to marketing practices by large businesses “when most travel was booked in-store”, with chief executive Sarah Cardell saying the review “will ensure only those remedies delivering real impact remain in place”.

The review comes as the CMA investigates Hays Travel’s takeover of Polka Dot Travel and Millington Travel. Those wishing to respond to the consultation have until March 2.