Dive Brief:
- OpenTable, the largest restaurant booking platform in the U.S., updated its client agreement to forbid restaurants from giving diner data to other platforms without paying a fee, according to The Wall Street Journal.
- The move has sparked a debate over whether or not OpenTable is attempting to lock out rival SevenRooms, which uses data collected by restaurants that are on the OpenTable platform into its system.
- In response to criticism, OpenTable has agreed to allow SevenRooms integration into its system so long as restaurants pay a fee.
Dive Insight:
At its core, this issue shines a bright light on a major narrative taking hold across the entire restaurant industry: Who owns customer data, the restaurant or the technology platforms that facilitate customer behavior, whether that means reservations, payments, ordering or delivery? OpenTable CEO Steve Hafner told The Wall Street Journal that data is not the restaurants' while restaurant operators interviewed by The Wall Street Journal say the exact opposite.
Hafner said that the changes were made to protect diners' privacy, not to black out any competitors.
"We're morally and legally obligated to protect everyone’s privacy interests. We can't stand by while third parties systemically harvest data from our systems without adequate user consent," Hafner said in an email to users.
He also explained to Nation's Restaurant News that SevenRooms was using restaurant login credentials to OpenTable to gather information on diners. SevenRooms also didn't have a prior agreement with OpenTable and didn't have to follow consumer requests to opt out of data sharing, according to Nation's Restaurant News.
In response to OpenTable's move, SevenRooms CEO Joel Montaniel encouraged its restaurant partners to email OpenTable to express their desire for both systems to work together. He accused OpenTable of preventing them from running their businesses as they see fit.
The timing of this debate is curious. Seven Rooms received an investment from Amazon's Alexa Fund in October, allowing for in-service voice-enable technology for the restaurant industry, no doubt a big advantage in the space. This funding marked the first time the Alexa fund invested in a restaurant technology company, according to the company.
Debates over user data have also taken hold between delivery aggregates and restaurants. Some restaurant brands have even implemented in-house delivery platforms to ensure they maintain control over their customers' data. The ability to mine and analyze consumer data to target loyal guests and attract new ones is one of the few ways restaurants can differentiate themselves in a bloated and competitive space. This is quite a paradox, as it is becoming a competitive necessity for restaurants to have that data at a time when aggregates are taking control of that data instead. Essentially, restaurants are competing with their technology providers, in addition to other restaurants.
But OpenTable only exists because of its restaurant partners. That being said, privacy and security are legitimate concerns, and it comes down to what the consumer wants.
