- Hotel Uprising against Booking dot com
In a significant development for the online travel industry, more than 10,000 hotels across Europe have filed a class-action lawsuit against Booking.com, alleging antitrust violations tied to "best price" clauses. The legal dispute, supported by the European hotel alliance Hotrec and over 30 national associations, including the German Hotel Association (IHA), centres around Booking.com's practice of requiring hotels to maintain rate parity, a practice that restricted hotels from competing on price outside of Booking.com.
The practice of rate parity, also known as best price clauses, obliged hotels not to offer their rooms on Booking.com cheaper than on other channels, even on their own websites. This restriction, according to the hotels, prevented them from attracting direct bookings at competitive rates on their own platforms.
The dispute stems from a 2024 ruling by the European Court of Justice (ECJ) that such best price clauses were illegal as they violated EU antitrust laws by restricting competition in the online hotel booking market. Following this ruling, these clauses were banned under the EU’s Digital Markets Act (DMA) which came into force in 2024 within the European Economic Area.
Booking.com, however, has denied receiving an official lawsuit so far. The company has argued that the best price clauses were necessary to combat "free-rider" bookings, where customers discovered a hotel on Booking.com but then booked directly on the hotel’s website at a lower price.
The debate about best price clauses is not new and has been ongoing in Germany for several years. In 2013, Germany's Federal Cartel Office prohibited HRS from using best price clauses. Norbert Kunz, CEO of the German Tourism Association (DTV), has stated that market competition in the vacation rental sector benefits travellers and leads to lower prices.
The registration deadline for the class action lawsuit has been extended to August 29. Participation in the lawsuit is free and risk-free for hotels. The damage claims of the class action lawsuit relate to the period from 2004 to 2024.
Booking Holdings holds a market share of 71% in Europe, with 72.3% in Germany, according to a study by Hotrec and the University of Applied Sciences Western Switzerland. The European Court of Justice ruled in September 2024 that price binding clauses can generally violate EU competition law, but a final clarification must be made by an Amsterdam court.
The initiative is coordinated by the Hotel Claims Alliance Foundation. If successful, the lawsuit could potentially result in significant compensation for the affected hotels. The hotels are seeking damages for around two decades of alleged antitrust violations tied to these clauses.
As the legal proceedings unfold, it remains to be seen how this dispute will shape the online travel industry in Europe. The outcome could have far-reaching implications for other online travel agencies (OTAs) operating within the region.
[1] Hotel Claims Alliance. (2022). Retrieved from https://www.hotelclaimsalliance.com/
[2] European Court of Justice. (2024). Retrieved from https://curia.europa.eu/juris/liste.jsf?language=en&num=C-426/15
[3] Booking.com. (2021). Retrieved from https://www.booking.com/
[4] Hotrec. (2024). Retrieved from https://www.hotrec.eu/
- The hotels involved in the class-action lawsuit against Booking.com argue that the employment of rate parity, also known as best price clauses, hinders their ability to offer competitive prices on their own websites, affecting their lifestyle choices and travel plans.
- As the legal proceedings progress, the travel industry in Europe may witness significant changes, potentially influencing the employment policies of online travel agencies (OTAs), especially in light of the recent EU ruling that such best price clauses could violate EU competition law.
