Rakuten, Booking.com, Expedia raided by Japan antitrust watchdog

So what I’m hearing is that the government wants to protect companies over consumers? Apparently, they don’t believe we should pay lower prices, they want us to pay the highest possible price for products.

@JJ Jetplane - no, I don't think that's what's going on. What it means is that the hotels are not allowed to offer a lower price than Expedia elsewhere.

So, even if a competitor arrives offering the hotels a lower commission, the hotels are not able to lower the price.

JJ Jetplane

"So what I’m hearing is that the government wants to protect companies over consumers?"

A helping hand:

https://www.udemy.com/topic/reading-comprehension/

urged clients to set accommodation prices the same as, or lower than, those they offered on rival websites

Agreed to make their product line-ups competitive or at least match those on rival retailer sites

My reading comprehension is fine. @yabby and @ADK99 I think you two should read again. They are not demanding they offer a lower price. As the article clearly stated, these sites are requesting that the companies at least match prices offered on rival sites. Which means, they are maintaining competition.

I thought long and hard about whether to reply or not in regards to JJ Jetplane's comment. I felt Adk99 was sincere in his/her comment in trying to point out JJ Jetplane's misunderstanding. Yabby was trying to do the same thing as Adk99 but was more sarcastic and probably hurt JJ Jetplane's feelings. Both of them understood the entirety of why the government stepped in to investigate anti-competitive practices by parties involved and tried unsuccessfully to convince him/her of that.

Initially, I felt JJ Jetplane's comment was not attributable to his/her understanding of the article though it could have been. Had he/she taken ADK99 or Yabby's comments into consideration and read over the article again, maybe JJ Jetplane would have truly grasped what his/her fellow users were trying to explain to him/her.

Rather than point out the obvious fact that readers/commentators so readily defend their initial comments than to even possibly consider the validity of others, I would like to only focus on JJ Jetplane's comment:

"So what I’m hearing is that the government wants to protect companies over consumers? Apparently, they don’t believe we should pay lower prices, they want us to pay the highest possible price for products."

The above comment lacks both understanding of the article and of standard business practices in particular the hotel industry as a whole.

So I offer an example that maybe JJ Jetplane can understand:

Let us imagine JJ Jetplane was the owner of a hotel chain. He/she would like to list his/her hotel rooms on websites like expedia/rakuten/booking/etc... Of course, to list on these sites, every time someone books JJ Jetplane's hotel room, JJ Jetplane would have to give up a percentage of the price paid . Let us imagine that these sites demand JJ Jetplane give up a 10% fee to list on their sites. So JJ Jetplane would have to give up 1,000yen on a 10,000yen booking. (JJ Jetplane, do you follow so far? )

Now let us imagine another online site such as Agoda contacts JJ Jetplane and offers him/her an opportunity to list his/her hotels on their site with booking fee of 5%. (JJ Jetplane, this would mean that you would save 500yen for your booking)

Of course, JJ Jetplane could in effect make more money on Agoda compared to Expedia/Rakuten/booking.com since he does not have to lose money due to booking fees.

Therefore, JJ jetplane could in essence post his hotel on Agoda for LESS compared to Rakuten/Expedia/Booking and still make the same amount (after booking fees) . This would in turn lower costs to customers and for the hotel owner/chain.

Now, instead of using JJ Jetplane as a hotel owner to explain, let me refer to smarter owners like Marriott, Hilton, Hyatt. These hotel groups understand to maximize profits, they need to lower their dependence on third party sites. That is why they introduced "member pricing" whereby, members enrolled in their loyalty programs are offered : better benefits, points accumulation, loyalty recognition, and most importantly, better pricing for hotel stays.