Business
ECJ Ruling: Defeat for Booking.com in Dispute over Best Price Clauses
The ECJ ruled that best price clauses from booking portals such as Booking.com are subject to the European antitrust ban. This strengthens the position of many hotels and ends the years-long dispute over pricing on the portals.
In the legal dispute over so-called best price clauses in hotel bookings, the booking portal Booking.com has suffered a defeat before the European Court of Justice (ECJ). The ECJ ruled that such clauses are not fundamentally exempt from the ban on cartels, which strengthens the position of many hotels in Europe.
Background of the proceedings is the longstanding conflict between hotels and online booking portals such as Booking.com, HRS, and Expedia. These portals allow users to compare rooms at different hotels and book directly. For each successful booking, the portal charges a commission from the hotel, which is usually included in the room price.
Price-parity clauses prohibited hotels from offering rooms at lower rates on their own websites or other distribution channels than on booking platforms. These clauses had been declared invalid in Germany by the Federal Cartel Office and the Federal Court of Justice. However, the Amsterdam court sought clarification from the European Court of Justice (ECJ) on whether such clauses could be classified as permissible ancillary agreements to prevent, for example, free-riding.
The Luxembourg judges, however, clarified that the cartel ban also applies to best price clauses. While the offerings of online booking platforms contribute to better competition by allowing consumers to compare offers and increasing the visibility of hotels, the clauses are not necessary to ensure the economic viability of the platforms.
The Hotel Association of Germany (IHA) welcomed the ruling. Markus Luthe, the association's chief executive, said: "The ECJ ruling confirms the antitrust nature of the best price clauses. We now hope for a decision on compensation claims from German hotels due to the years-long use of these clauses.
For travelers, the ruling is likely to have little direct impact, as Booking.com already abolished the best price clauses in the European Economic Area earlier this year with the introduction of the EU Digital Markets Act (DMA).
Booking.com expressed disappointment after the ruling and emphasized that the parity clauses had been necessary and appropriate. The decision on the specific case now lies with the Dutch courts.
The stock of Booking.com fell in NASDAQ trading by 0.27 percent to 4,017.51 US dollars after the decision.
