I am writing to express my concern about potential anti-competitive practices facilitated by a company called Preno HQ, which provides a dynamic pricing tool for small accommodation providers in New Zealand. While dynamic pricing itself can be beneficial, I worry that Preno HQ's practices might lead to price fixing and other anti-competitive behaviors that could harm consumers.

Preno HQ’s dynamic pricing tool adjusts room rates in real-time based on market demand, similar to pricing models used by the airline industry. This technology, while advantageous for small hotels and motels, raises several concerns:

Price Fixing: If Preno HQ’s tool enables competitors to share sensitive pricing information and coordinate their room rates, this could constitute illegal price fixing under Section 30 of the Commerce Act 1986. For instance, if the software allows hotels to set prices based on non-public data from other competing hotels, it may effectively create a mechanism for price collusion.
Reduced Competition: The dynamic pricing tool might lead to similar pricing among competitors, reducing competition and causing consumers to pay higher prices than they would in a truly competitive market. This situation could be seen as substantially lessening competition, violating Section 27 of the Commerce Act 1986.
Information Sharing: Preno HQ might facilitate anti-competitive information sharing if the tool collects and distributes pricing data among competitors in a manner that allows them to make coordinated pricing decisions. Sharing sensitive information among competitors can undermine the competitive process.

Specific scenarios that could potentially breach the law include:

Centralized Pricing Algorithm: If Preno HQ’s tool uses a centralized algorithm that inputs confidential competitor information and outputs coordinated price recommendations, it could replace independent pricing decisions with a coordinated scheme.
Use of Nonpublic Data: If the tool uses nonpublic data submitted by property management clients to make pricing estimates and shares this data among competitors, it might be facilitating collusion.
Market Manipulation: If the tool’s predictions and adjustments lead to artificially high or low prices that do not reflect genuine supply and demand conditions but rather the coordinated actions of competitors, this could be considered anti-competitive.

To prevent these potential breaches, I urge the Commerce Commission to investigate Preno HQ’s practices thoroughly. It is crucial to ensure that their dynamic pricing tool complies with antitrust laws and promotes fair competition without facilitating price fixing or other anti-competitive behaviors.

Thank you for your attention to this matter. I trust that the Commerce Commission will take the necessary steps to safeguard consumers and maintain a competitive market environment in New Zealand.

Sincerely,

[Your Name]
[Your Signature] (if sending a hard copy)

[–] [email protected] 0 points 4 months ago (1 children)