Reuters: FTC prepares action against Booking Holdings over hotel ads

The US Federal Trade Commission (FTC) is preparing action against Booking Holdings, the owner of Priceline, over online advertisements that appear to lead to a hotel’s own website but send the consumer to a third-party booking site, where they often pay more. Reuters reported the move on 7 October 2026, citing two people familiar with the matter. One of them said the case could carry potential penalties of more than $500 million.

An FTC spokesperson confirmed the investigation to Reuters and declined to comment further. A Priceline spokesperson declined to comment. No complaint has been filed and no timetable has been made public.

What the regulator is examining

According to the Reuters report, the agency has been examining Booking’s relationship with Guest Reservations, a third-party site that advertises stays at specific hotels. The FTC is weighing whether Guest Reservations’ sites, which often carry higher room prices and fees, breach its rule against impersonating other businesses, along with other possible violations relating to fees.

The link between the two companies is set out in a lawsuit brought by the City of San Francisco, which is still in progress. That suit says Booking supplies hotel room inventory to Guest Reservations through Priceline Partner Solutions. Travel Weekly reports that City Attorney David Chiu filed the case in late July against GuestReservations.com and BookOnline.com, and that Booking has said it believes the lawsuit lacks merit. Guest Reservations says its site uses hotel trademarks or information only to help customers book rooms, Reuters reported. It did not respond to a Reuters request for comment.

Booking disclosed in August that the FTC was considering suing Priceline and an affiliate over disclosures, fees, customer support and billing practices. It did not name the affiliate and said it was in talks with the agency to resolve the matter.

The scale of the complaint

Reuters reported that the Better Business Bureau has received more than 1,000 consumer complaints about Guest Reservations. Many complainants believed they were booking directly with the hotel, and others cited surprise fees and unresponsive customer service.

Travel Weekly cites research by hospitality technology company Operto, which counted 1.1 million predatory ads targeting hotel-branded searches over 31 days to 21 June, affecting 204,000 hotels worldwide. Operto said US properties were hit hardest and that nearly half the ads came from GuestReservations.com. Its review of 232 Better Business Bureau complaints found 38% of complainants thought they had booked direct, 46% cited deceptive or false cancellation policies and 34% cited hidden or undisclosed fees.

How the hotel industry responded

An American Hotel and Lodging Association spokesperson told Reuters that misleading third-party booking sites have been a persistent problem for years. Laura Lee Blake, president and chief executive of the Asian American Hotel Owners Association, which represents nearly 20,000 US hotel owners, said owners and staff often deal with the complaints when third-party bookings go wrong, and that she had herself booked through a third-party site believing it was the hotel.

Hilton, Marriott and IHG declined to comment to Reuters, and Hyatt did not respond. Asian Hospitality notes that the FTC is also considering whether online platforms should do more to stop such ads.

Not disclosed: the form of the action, its timing, the legal basis for the penalty figure and whether a settlement is being negotiated have not been made public. The $500 million figure comes from a single unnamed source and is described as potential.

THD’s reading

• THD analysis, for owners: brand-name search hijacking costs hotels twice, once in lost direct bookings and again at the front desk when guests dispute fees the property never charged. A federal case would put a price on that practice for the first time.
• THD analysis, for operators: log every guest complaint that traces back to a look-alike site, with booking source and amount. Trade bodies and regulators are asking for exactly this evidence.
• THD analysis, for distribution teams: the inventory route matters. Audit which wholesale and affiliate partners can redistribute your rates, and where those rates surface under your own brand name in paid search.
• THD analysis, for markets outside the US: Operto’s count covers 204,000 hotels worldwide. Operators in India, the Gulf and Europe should check their own brand terms and not assume this is an American problem.