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On Tue, Nov 5, 2023, the Amsterdam District Court ruled in favor of Booking.com's key arguments in a legal dispute with German hotels concerning historical rate parity clauses. The court found insufficient evidence from the hotels to prove that…
On Tue, Nov 5, 2023, the Amsterdam District Court ruled in favor of Booking.com's key arguments in a legal dispute with German hotels concerning historical rate parity clauses. The court found insufficient evidence from the hotels to prove that Booking.com's pre-2016 clauses breached competition law. This decision addresses legal questions but does not conclude the case, which has been ongoing for over five years.
Maria Barros, Chief Legal and Public Affairs Officer at Booking.com, expressed satisfaction with the interim ruling. She affirmed that Booking.com's past use of parity clauses, discontinued in Germany since 2016, did not violate competition law. The court noted that the hotels have not yet provided evidence to the contrary.
The court also questioned the market definition previously used by German authorities and courts, suggesting they did not adequately consider competition from alternative sales channels as required by a 2024 ruling from the Court of Justice of the European Union. The German Supreme Court recently ordered a review of this market definition in light of the ECJ decision.
The dispute involves historical hotel pricing rules employed by Booking.com, which restricted hotels from offering lower room rates on other channels compared to those listed on Booking.com. One version of these clauses applied to third-party platforms and hotel websites, while a narrower version mainly affected a hotel's own site.
The court found insufficient evidence from the hotels to prove that Booking.com's pre-2016 clauses breached competition law.
Booking.com ceased using the broader version in Europe in 2015, and the narrower version was discontinued in Germany in 2016 following objections from German regulators. Hotels argue these clauses limited their pricing autonomy and hindered direct bookings. Booking.com contends the clauses protected the marketing exposure it provided. A European Commission monitoring report suggested that after transitioning from broader to narrower rules, 40% of surveyed hotels in 10 member states offered lower prices on their own websites, indicating the clauses influenced pricing behaviors.
In a September 2021 ruling, the Court of Justice of the European Union stated that Booking.com's price parity clauses do not automatically exempt from EU competition law. These clauses require a comprehensive assessment under competition regulations.
The ECJ also highlighted that online booking platforms can enhance competition by increasing visibility and aiding travelers in comparing options. It stated no objective necessity or proportionality was demonstrated for parity clauses. Booking.com collaborates with over 2.3 million accommodation partners across Europe, connecting them with global travelers. The outcome of the German case may influence how European courts assess competition between hotel websites, online travel agents, and other booking channels.
Based on reporting by techround.co.uk.