Dispute over Booking.com

ECJ ruling strengthens hotels with best price clauses

The ruling is likely to have only a limited effect for travelers: Booking.com had abolished the best price clauses in the European Economic Area this year.

(Bild: stock.adobe.com, Krone KREATIV)

The Booking.com portal has suffered a defeat before the highest European court in the dispute over so-called best price clauses when booking hotel rooms. The European Court of Justice (ECJ) ruled that best price clauses are not exempt from the ban on cartels from the outset, thus strengthening the position of many hotels.

The background to this is a long dispute before German and Dutch courts. On portals such as Booking.com, HRS and Expedia, users can compare a wide range of hotels and other accommodation and also book directly. The operator collects a commission from the hotel for every successful booking made via the site. This is factored into the room price - so the user pays indirectly.

When booking directly with the hotel, such a commission is naturally not charged. The rooms could be cheaper here. This is where Booking.com's so-called best price clauses come in, which prohibit hotels from offering rooms at a lower price via their own sales channels, for example. The German Federal Cartel Office and the German Federal Court of Justice declared these clauses invalid. 

Now an Amsterdam court wanted to know from the ECJ whether such clauses could be permissible as ancillary agreements and therefore not fall under the ban on cartels - for example, because they could prevent free-riding, i.e. customers looking at rooms on Booking.com but then booking them at the hotel itself.

The judges decided that the ban on cartels could very well apply in this case. It is true that the provision of online hotel booking services by platforms such as Booking.com has a neutral or even positive effect on competition. On the one hand, consumers are able to compare the various accommodations much more easily. On the other hand, hotels would gain greater visibility. However, the best price clauses are not necessary for Booking.com and other platforms to remain economically viable.

Limited effect
The ruling is likely to have only a limited effect for travelers: Booking.com had abolished the best price clauses in the European Economic Area this year. The reason given for this was the EU Digital Markets Act (DMA). This aims to promote more competition in digital services with stricter rules for large platforms.

Booking.com announced after the ruling that it was disappointed. The company remains of the opinion that the parity clauses that previously existed in Germany were "necessary and appropriate with regard to the relationship between our accommodation partners and Booking.com". The Amsterdam court must now decide on the specific case.