Canada’s Competition Bureau has reached an agreement with travel software developer Softvoyage, after the company was alleged to have created barriers preventing competitors from accessing the marketplace.
"We commend Softvoyage for its collaboration in resolving our concerns,” said John Pecman, Commissioner of Competition. “We believe that today's agreement will promote greater competition and innovation in the travel industry, resulting in better choices for Canadian travellers."
The Bureau says Softvoyage Inc.’s dominance of the market for content management software used by most tour operators allegedly saw the company start including exclusivity clauses in its contracts.
These clauses would then allegedly force tour ops using Softvoyage products to use only the company’s software for the distribution and sale of vacation packages. The Bureau says this created a barrier to entry or prevented the viability of any current or potential competitors in the marketplace.
The Competition Bureau says its investigation focused on markets related to the supply of essential software for managing and distributing all-inclusive travel packages in Canada. The Bureau also investigated allegations that restrictive terms in Softvoyage's contracts with tour operators and travel agencies harmed competition and innovation by excluding rivals.
One of those rivals, UK-based Traveltek, had this to say to Open Jaw about the decision:
“Traveltek welcomes the decision of the Competition Bureau and Softvoyage, and looks forward to working with the Canadian travel industry to provide the best-in-class technology solutions to maximize sales, productivity, customer loyalty, and distribution,” said Peter Whittle, Director, Global Sales.
Open Jaw also reached out to tour operators for comment. The only reply was from one senior tour op executive, who wished to remain anonymous. “This is huge,” the executive stated.
The Bureau says its findings were informed by interviews and documents provided voluntarily by Softvoyage and a number of other market participants, including travel agencies, tour operators, industry associations and former and potential competitors of the software developer.
Softvoyage says it is satisfied with the agreement.
“For the last 30 years, there has been virtually no competition for IT solutions for vacation packages in Canada, which has never stopped us from continuing to develop state of the art technology and give the best service to the thousands of stakeholders using our systems daily,” the company said in a press release.
“This agreement with the Competition Bureau pushes us to be better and makes us aware of our position and our role.”
As part of the agreement, Softvoyage says it will refrain from enforcing certain clauses or portions of its clauses contained in its contracts with its clients over a period of seven years.
The company added: “Softvoyage is committed to putting in place processes to ensure that Softvoyage’s business model will continue to respect the laws of competition. Among these processes, a corporate compliance program whose objective is to educate and sensitize its employees to the provisions of the law will be set up within Softvoyage in 2018.”
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.