Report from Reuters
In Brief – Hotel associations from 26 European markets plan to file a class-action lawsuit against Booking .com in the Netherlands over 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 including competing platforms and hotel’s own websites. The lawsuit follows a September 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 hope to reclaim a significant portion of commissions paid to Booking between 2004 and 2024, potentially plus interest. Filing the lawsuit in the Netherlands, which is Booking’s country of establishment in the EU, allows all European hotels to consolidate their claims in a single jurisdiction through a single litigation. Booking responded to news of the pending suit by saying that the hotel trade groups are mistaken in their view of the ECJ ruling, claiming that the court only addressed a narrow legal question regarding contract clauses used in Germany between 2006 and 2016 and, even then, “did not conclude that Booking’s German parity price clauses were anti-competitive or had an effect on competition.” The online booking site added that it has already ended the use of such clauses in Europe to comply with the EU’s Digital Markets Act regardless.
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 record 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.