Journal: TWUK Section:

The rules on vertically integrated companies are finally changing but will it really make a difference when the rules are so very vague?

Noel Josephides

A very righteous-sounding Dr Kim Howells, the consumer affairs minister, has proudly announced that by October 9 this year, the vertically integrated travel groups with more than 5% of the tour operator or travel agency markets will have to give notice of ownership links on the outside of their travel agency shops, on notices inside those shops, on brochures of the group’s tour operators, on business stationery and in advertisements.

Well, it has taken the Government almost three years to do what it could have done within a few weeks of the Monopolies and Mergers Commission’s recommendations on transparency.

In the meantime, the consumer, whom Dr Kim Howells is there to protect, has generally had no idea who he/she was booking with when walking into one of the multiples.

Even now it all seems delightfully vague. Dr Howells goes on to say in his press release: “I will be asking the director general of fair trading to write to the vertically integrated groups to ask what steps they are taking to comply with the order. If any response is not satisfactory, the order gives me the power to give statutory directions requiring action from those concerned.”

Since the MMC’s recommendations were made, the industry has changed dramatically. E-commerce has appeared on the scene, call centres proliferate and a large chunk of the industry is owned by the Germans.

So, how big will these notices on the outside of windows be? No guidance is given. They could be insignificant.

Once inside, will there be a notice next to each VDU screen and where the customer sits? Will the travel clerk bring the notice to the attention of the customer? In the three years the Government has been thinking about this matter, what has it actually done?

And what about call centres? Thomas Cook, for instance, runs call centres for organisations other than its own. When a call comes through will the person taking the call warn the customer that they are likely to be recommended in-house products?

What about the different names used on Web sites by the vertically integrated firms?

I assume that they will be forced to inform the public looking at the site as to who the ultimate owner is. Who will be able to police what is happening?

Then we come to organisations like the Global Travel Group, famous for its championing of Airtours’ products and now closely linked publicly and commercially with that company.

When a client walks through the door, will they be able to push Airtours’ products without informing the customer of the special relationship between the two firms?

Will the Simply Travel Group, the Magic Group, Headwater Holidays, Something Special, Meon, Cachet Holidays and so on and so forth have to mention their parentage on brochures? How prominent will this be? Will they have to comply on summer 2001 brochures?

Can they get away with hiding it somewhere in their booking conditions so no-one sees it? Will it have to be on the front cover? Who is going to decide? What guidelines have been given?

Unfortunately, this government has proved, yet again, that it is all talk and no action. It runs scared of big business and is really quite ineffectual.

“Who will be able to police what is happening?”