Duff on Hospitality Law

For those of you in the U.S. and Canada, happy Independence Day. This week’s Update features a number of important legal updates – both in the U.S. and in the EU.  The next 6-9 months should prove to be interesting as the EU moves forward with the implementation of its new digital legal framework – the Digital Services Act (DSA) and Digital Markets Act (DMA).  I hope you enjoy.

• • FTC Identifies Possible Competition Concerns with Generative AI.  This past week, the FTC published a blog post detailing its view of potential competition concerns with generative AI.  Key building blocks identified by the FTC for the successful use and implementation of generative AI (and all favoring large industry incumbents over new industry participants) include (1) data, (2) talent and (3) computational resources.  Identified areas of concerns include a number of “industry standards” seen with prior emerging technologies – control of critical inputs, bundling and tying of products and services and exclusive dealing.  Here we go again.
    
    
  • First Fraud, Now Chargebacks.  Having heard firsthand this past week while at HSMAI’s events in Toronto of hoteliers’ growing frustration with chargebacks, I wasn’t surprised by the results of Outpayce’s (Amadeus payments business) recent survey of travel executives, which, among other things, detailed the travel industry’s growing chargeback challenge.  According to the survey, over two thirds (71%) of the respondents have seen an increase in chargebacks with 33% experiencing a growing number of chargeback disputes over the past year.  According to the survey, respondents attributed the increase to a number of factors - (1) consumers view that the chargeback process is easier (thanks in part to mobile banking apps) than refunds and (2) consumers’ increased awareness of chargebacks generally. 
    
    
  • Booking.com Designated a “Very Large Online Platform” Under DSA.   As many wait to learn Booking.com’s fate under the DMA (i.e., whether Booking.com will be designated a “Gatekeeper”), it is important to remember that Booking.com has already been designated a “Very Large Online Platform” (VLOP) under the DSA.  Back in April of this year, the EU Commission announced its decision that Booking.com satisfied the 45 million monthly active user threshold to be designated a VLOP.  Why is this important?  First, Booking.com’s designation as a VLOP may be a telltale sign of its pending gatekeeper designation.  Second, recent events may provide some indication as to how Booking.com might challenge (and ultimately delay) its VLOP designation or possible future gatekeeper designation.  Late last month, German online retailer Zalando, also a recent VLOP designee, filed suit appealing its designation, arguing that its unique hybrid model (combining both retail and platform businesses) caused it to fall well below the 45 million user threshold.  What effect Zalando’s claims might have on its designation or its eventual compliance with the many VLOP content requirements is unclear, but we may soon see other designees – Booking.com – following Zalando’s example.

For those of you who attended HSMAI’s events this past week in Toronto, it was great seeing so many of you at Monday’s roundtables.  I hope each of you got as much out of our sessions together as I did.  Have a great week.