Photo/IllutrationTourists gather in front of Kaminarimon gate in the popular Asakusa district of Tokyo on April 10. (Kosuke Tauchi)

The offices of three major Internet travel booking sites were searched on April 10 by the Fair Trade Commission on suspicion they were engaged in unfair business practices.

Investigators were looking into whether the sites violated provisions of the Anti-Monopoly Law by asking the hotels and inns for which they took reservations to not provide rooms at rates lower than those on the sites.

The sites being investigated are Rakuten Travel, operated by Rakuten Inc., Booking.com and Expedia. The latter two sites are popular with foreign tourists to Japan while Rakuten Travel serves a high proportion of the Japanese users of domestic hotels and inns.

All three sites earn commissions from hotels and inns for which they take reservations.

According to sources, the sites are suspected of signing contracts with lodging facilities asking that they be allowed to offer lower rates or the same as those offered by the facilities themselves through their own websites or on other competing websites. There are also suspicions that the contracts had provisions about the number of rooms those sites would be able to take reservations for.

Such parity provisions are considered a violation of the Anti-Monopoly Law because the lodging facilities that enter into such contracts will be unable to freely conduct business since they would be obligated to provide favorable treatment to the booking sites.

In particular, such contracts prohibit the lodging facility from offering rooms on its own website at rates lower than those listed on the booking sites. The facility would not have to pay a commission for reservations made through its website.

The contracts also make it more difficult for competing booking sites to undercut rivals by offering lower commissions to the lodging facility.

Overseas authorities have also been looking into the parity provisions included in contracts by Internet booking sites. In particular, German authorities in 2015 ordered Booking.com to remove such provisions. Similar investigations were conducted in Britain and France.

In a January report by the FTC about its study into online shopping malls, it stated its intention to deal strictly with any acts that may be a violation of the Anti-Monopoly Law.