By James Konstantin Galvez ( February 12, 2026, 06:15 GMT | Insight) -- Malaysia’s competition regulator has spotlighted competitive concerns in the online travel agency sector following a digital economy market review. The study found a concentrated market structure dominated by a few global platforms and raised issues around rate-parity obligations, commission-influenced search rankings and unequal access to consumer data. It also noted questionable consumer-facing practices and gaps in existing tourism laws covering digital intermediaries. Although not an enforcement action, the review signals potential policy moves to enhance transparency and rebalance platform–hotel relationships.Malaysia’s competition authority has identified price-parity clauses, commission-driven visibility and regulatory gaps as key competition risks in the country’s fast-growing online travel agency, or OTA, segment, as part of its market review of the digital-economy ecosystem.The Malaysia Competition Commission, or MyCC, examined accommodation-focused OTAs, covering hotel and hostel bookings but excluding homestays and short-term rentals. The review forms part of a broader assessment of four digital sub-sectors under the Competition Act 2010.OTAs are digital platforms that facilitate the booking of travel-related services by connecting travelers with various service providers across the travel ecosystem. These platforms let users search, compare and book travel options such as accommodation, flights and travel packages, making trip planning easier and more efficient.— Highly concentrated structure —The OTA market has expanded sharply since the pandemic, with online hotel expenditure rising from about $357 million in 2020 to more than $828 million in 2023. OTAs account for roughly one-third of domestic hotel bookings, closely competing with direct online bookings by hotels.Market shares cited in the review suggest a highly concentrated structure. Agoda and Booking.com each are estimated to hold between 30 percent and 40 percent of the Malaysian OTA market, with the remainder split among players including Trip.com, Traveloka and Expedia. Concentration metrics cited by the commission point to limited competitive constraint at the top of the market.The OTA ecosystem involves multiple layers — travellers, platforms, hotels, wholesalers, metasearch engines and payment providers — with traffic often originating from search engines or metasearch tools before being routed to booking platforms.Google’s dominant position in general search and the role of metasearch platforms such as Trivago and Skyscanner were highlighted as structural features shaping consumer flows and platform visibility.— Price parity under scrutiny —One of the central competition concerns identified is the use of price-parity clauses. These contractual terms typically require hotels to maintain rate consistency across different sales channels, including their own direct booking websites.While parity clauses can reduce search costs and prevent free-riding, the review notes that hotels may feel commercially pressured to accept such terms because OTAs can account for a substantial share of their bookings. Some stakeholders indicated that OTA-generated reservations can exceed 75 percent of room sales in certain cases.The commission suggests that parity obligations, combined with the bargaining power of large platforms, may limit hotels’ ability to differentiate prices or offer discounts through direct channels.— Commission and algorithmic ranking —Another issue identified is the relationship between commission levels and platform visibility.Hotel ranking algorithms typically incorporate factors such as price, availability and consumer ratings. However, participation in promotional campaigns or higher commission structures may influence placement and prominence.Smaller and independent hotels may find it difficult to compete for visibility if enhanced ranking requires higher commission payments or marketing contributions. This dynamic may reinforce the position of larger chains with greater financial flexibility.The review also notes complaints about OTA bidding on hotel brand keywords in online advertising, potentially diverting traffic from hotels’ own websites.— Data asymmetry and dependency —OTAs collect extensive first-party data from booking transactions, search behavior and customer preferences. While hotels receive core reservation information, platforms retain broader datasets that enable personalized recommendations, pricing optimization and cross-selling.The commission characterizes this asymmetry as a structural feature that may entrench platform power and increase business-user dependency.The report also points to emerging use of generative artificial intelligence tools for itinerary planning, review summarization and customer service. While these innovations can enhance consumer experience, they may further concentrate data and reinforce ecosystem lock-in.— Consumer-facing practices —Beyond structural concerns, the review identifies several market practices affecting both hotels and consumers. These include drip pricing, pressure-selling tactics, misleading reviews and overbooking risks.High and largely non-negotiable commission rates were cited as a persistent concern among accommodation providers, particularly small and medium-sized operators.— Regulatory gaps —The commission also identified regulatory uncertainty in relation to digital-first and foreign-based OTAs operating in Malaysia.Existing tourism legislation does not explicitly address platform-based intermediaries, and oversight is dispersed across different agencies. The review calls attention to the need for clearer regulatory delineation and coordination, particularly as digital platforms expand into integrated “super-app” ecosystems combining travel, transport and financial services.Amendments to relevant tourism laws were reported to be under consideration as of late 2025.— Policy direction —While the market review does not constitute an infringement decision, it signals areas where MyCC may develop guidelines or pursue further engagement with stakeholders.Potential reforms discussed in the broader digital economy review include improving transparency in ranking and pricing mechanisms, addressing restrictive contractual practices and clarifying regulatory coverage of digital intermediaries.The OTA findings underscore the commission’s broader concern that multi-sided digital platforms, characterised by network effects and data concentration, may create structural barriers to entry and bargaining imbalances between large platforms and business users.For now, MyCC’s review stops short of enforcement action. But the detailed scrutiny of price parity, commission-linked visibility and data practices indicates that Malaysia’s competition authority is positioning itself for closer oversight of the travel-platform segment as the digital economy continues to expand....