Monday, August 15, 2022 | 05:48 pm

Airbnb Could Join Europe’s ‘Gatekeeper’ List Alongside Google and Amazon: FT

Airbnb Could Join Europe’s ‘Gatekeeper’ List Alongside Google and Amazon: FT

Airbnb Inc could face headwinds in Europe with its potential inclusion as a “gatekeeper” portal under the new Digital Markets Act, the Financial Times reported Sunday.

The European authorities are still deliberating over the internet regulation guidelines and the list of parameters to be used for judging tech companies.

What Happened: If categorized as an intermediary portal, or a gatekeeper, Airbnb would be subject to stricter competition rules — at par with big tech companies like Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) and Amazon Inc (NASDAQ: AMZN).

Up to 20 companies, including Airbnb’s market peer Booking Holdings Inc (NASDAQ: BKNG), could also fall under the purview of these stringent new guidelines, as per FT.

Europe’s new digital act aims to control and reduce monopolistic business practices by levying restrictions on online intermediaries. Gatekeeper companies could be prohibited from using their portals to promote their own product offerings over a smaller business rival’s products.

Additionally, in an attempt to control competition, these intermediary companies could also be forced to share select data with competing business enterprises operating on a smaller scale, FT noted.

Why Does It Matter: A draft version of the Digital Markets Act is expected sometime in December.

The vacation rental company filed draft paperwork for an initial public offering in August. According to Reuters, the company could raise as much as $3 billion in its IPO in December at a valuation of around $30 billion.

Based on Statista’s research on vacation rentals, overall revenues in 2020 are projected to fall 41% year-over-year. For the quarter ending June, Airbnb posted $335 million in revenues, a 67% decrease YoY, as reported by Bloomberg.

Jaques Lovell,  public affairs manager at the hotel trade body Hotrec, told FT he assumes that Airbnb’s market penetration in the short term rental business would be sufficient enough to classify the company as a gatekeeper under the E.U. rules.