The European Commission probes Booking Holdings for fraud and scams in listings

The European Commission opened formal proceedings against Booking.com, owned by Booking Holdings (BKNG), under the Digital Services Act. The Commission wants to investigate whether the platform does enough to remove fraudulent listings and stop phishing scams. The DSA requires large platforms to assess systemic risks and take steps to reduce them. Booking (BKNG) will be probed to see if it met those requirements.

The investigation covers three areas. The first is fake listings, such as rentals that don't exist, identity-theft scams, and offers that break regulations. The second is how Booking shares reservation and guest data with accommodation providers and how its messaging system works. The Commission will check whether Booking has enough safeguards to stop that data from being used for phishing and requests for fraudulent payments. The third is paid placement. Hotels can rank higher in search results by paying a bigger commission, and regulators will check whether those promoted listings are clearly marked as ads, including who paid for them and why users see them.

"Europeans should be able to book their holidays without fear of being scammed. The Digital Services Act sets clear responsibilities on platforms to address these risks, and we must ensure that the leading booking platform in Europe takes those responsibilities seriously," highlighted Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security, and Democracy.

Following the investigation, if the European Commission confirms violations, it could fine Booking (BKNG) up to 6% of its global annual revenue. However, Booking (BKNG) can still offer fixes to avoid a penalty. The EC noted that it will treat the case as a priority and may use interviews, inspections, or interim measures.

Shares of Booking (BKNG) edged 0.3% lower in premarket trading on Wednesday.