Booking Holdings Inc. shares plummeted 5.01% during intraday trading on Wednesday, as the online travel giant faces heightened regulatory scrutiny in a key European market.
The sharp decline follows the announcement by Italy's Competition Authority (AGCM) that it has opened an investigation into Booking.com and two of its subsidiaries over alleged unfair commercial practices. The probe focuses on the company's "Preferred Partner" and "Preferred Partner Plus" programs, which the regulator claims may mislead consumers. According to the AGCM, selection for these programs—which grant better visibility in search results—appears to be based primarily on which accommodation providers pay higher commissions to Booking.com, rather than on genuine quality or value-for-money criteria. This presentation, combined with quality endorsements from Booking.com, could allegedly steer users toward more expensive bookings.
Adding to negative sentiment, market reports noted that Chairman and CEO Glenn Fogel sold 7,496 shares of company stock in mid-April, a move some investors interpreted as a lack of insider confidence ahead of the company's upcoming earnings report. The Italian watchdog, assisted by the financial police, has already conducted inspections at Booking.com's Italian offices, signaling the seriousness of the investigation. Booking.com has stated it is cooperating with authorities and that its partner programs are optional and compliant with regulations.
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