Report from the Luxembourg Times
In Brief – More than 10,000 European hotel owners are joining together in a class action suit against the online platform Booking. com, claiming that they were financially harmed by the platform’s long-time use of price parity contract clauses that prohibited hotels using the site from offering a lower price on other online sales channels. The suit, filed in the Netherlands, which is Booking’s country of establishment in the EU, was announced by the Association of Hotels, Restaurants and Cafes in Europe HOTREC, which represents the industry within the EU, and is backed by 30 national hotel associations. The group argues that their legal action builds on a September 2024 ruling from the EU Court of Justice that questioned the legality of such clauses under EU antitrust law, stating that Booking failed to prove they were necessary or proportionate. The hotels aim to reclaim a significant portion of commissions paid to Booking between 2004 and 2024. Booking responded to news of the pending suit by saying that the hotel trade groups are mistaken in their view of the ECJ ruling, contending that the high court did not rule that Booking’s parity price clauses were anti-competitive. The platform also reiterated that it has ended the use of price parity clauses in Europe to comply with the EU’s Digital Markets Act.
Context – Price parity (or “MFN”) clauses of dominant digital platforms have been a regulatory concern for years, especially when used to limit lower-priced sales on competing digital platforms that charge sellers lower fees. Their use by hotel booking platforms has brought regulatory action in many global markets. Online food delivery platforms have also faced scrutiny. Amazon has an aggressive price parity track as well. Booking, long the top hotel reservation intermediation platform, and a platform that has had many run-ins with antitrust regulators over their price parity policies, was the first DMA “gatekeeper” company added by the European Commission to the original six – Amazon, Apple, Google, Meta, Microsoft, and ByteDance.