UPDATE 2-Italy's antitrust watchdog investigates TripAdvisor, booking sites

Wed May 21, 2014 3:25am EDT

(Adds comment from Expedia)

MILAN May 20 (Reuters) - Italy's competition watchdog is looking into TripAdvisor to see if the influential holiday review website takes appropriate measures to avoid publishing fake opinions.

The antitrust authority has also opened an investigation into online booking websites Expedia and Booking.com , saying their agreements with hotels may prevent consumers from getting a better deal.

In a statement on Tuesday, the watchdog said it had received complaints about TripAdvisor from consumers as well as hotel and restaurant owners.

TripAdvisor is a travel website that gathers readers' reviews of hotels and restaurants. The authority said in a separate document on its website that TripAdvisor may have published opinions of people who had not actually been to the places they rated.

It also said TripAdvisor did not make clear enough the distinction between information provided independently by travellers and business profiles that hotels and restaurants pay to get published on the website.

A TripAdvisor spokesman said the company took a tough stance on fraud and had confidence in its systems and procedures. Every review goes through a tracking system that uses complex algorithms to spot patterns of activity, he added.

Then there is "a team of over 200 content specialists, who manually investigate every review flagged for inspection by our systems", the spokesman said.

"We also have strong penalties in place to deter fraudsters and the very nature of our site allows for any inaccuracies to be quickly rectified."

The Italian watchdog gave details of its investigation into Expedia and Booking.com in a statement on Monday.

"The analysis centres on clauses applied by Booking and Expedia that prevent hotels from offering better prices and conditions through other online services and, generally, any other booking system (including hotels' own websites)," it said.

"The authority believes the use of such clauses by the main two platforms on the market may significantly limit competition."

A spokeswoman for Expedia said on Wednesday the company had been contacted by Italy's competition watchdog about so-called "most favoured nation" clauses in its agreements with Italian hotels, and would co-operate with the inquiry.

"Expedia is convinced it is acting in full compliance with all applicable laws, offering value to both consumers and ... more than 290,000 accommodation partners," she said.

The watchdog said it would conclude the investigation by August 2015.

The Priceline Group, which owns Booking.com, had no comment. (Reporting by Valentina Za; Editing by Mark Potter and Pravin Char)