HOTREC welcomes German court verdict prohibiting narrow price parity clauses
On 19 May, the German Supreme Court issued a landmark verdict prohibiting the ‘narrow’ best price clauses imposed by booking portal Booking.com on hotels. The court determined that these clauses infringe antitrust law in Germany.
The overwhelming European hotel booking portal market leader Booking.com will not be allowed to prevent hotels in Germany from advertising lower room prices on their own websites anymore. Hotels in Germany will now be in a position to offer better prices via their own websites, should they wish to do so, to the benefit of hotels and consumers.
HOTREC warmly welcomed the verdict in a press release, highlighting the importance of the news for German hoteliers and the significance of the verdict with regard to future EU rules on digital markets. HOTREC congratulated its Member organisation IHA for its resolute and determined action throughout this legal saga and applauded the German Federal Cartel Office for ensuring that competition law is upheld and developing through evidence to demonstrate the anti-competitive nature of price parity clauses.
Hotelverband Deutschland (IHA) had triggered the Cartel Office proceedings against Booking.com with a complaint in autumn 2013. In a cease-and-desist order issued on December 22, 2015, the Federal Cartel Office prohibited the booking portal from further use of best-price clauses – both in the form of broad rate parity (no more favourable rates on any other booking channel) and in the form of narrow rate parity (no more favourable rates on the hotel’s own website).
The German Federal Cartel Office was the first competition authority worldwide to rightly classify the narrow parity clauses used by Booking.com since summer 2015 as being in violation of antitrust law. Booking.com’s appeal against this decision was surprisingly successful at first instance before the Düsseldorf Higher Regional Court on June 4, 2019. The Federal Cartel Office has now succeeded in obtaining a review of the Düsseldorf ruling before the Federal Court of Justice via a non-admission appeal that was decided positively on July 14, 2020.
In Europe, bans on narrow price parity clauses have been banned by law in Austria, Belgium, France and Italy. Switzerland is expected to be the next European country to outlaw such practices.