ONLINE travel provider Booking.com’s restrictions against hotels offering lower rates on their websites or on rival sites are unnecessary and could reduce competition, the European Union’s top court said on Thursday (Sep 19) in a ruling.
However, the court added the practices were not anti-competitive under EU law.
Known as parity clauses and inserted into contracts between online booking sites and hotels, the practice has triggered complaints by competitors and scrutiny from Europe’s regulators, who are concerned about fewer choices for consumers.
Germany’s antitrust watchdog has banned such clauses whether they apply to hotels’ websites or rival accommodation sites, while regulators for the EU as a whole allow such curbs only for hotels’ own sites.
Landmark rules known as the Digital Markets Act ban large online platforms, such as Booking.com, from using wide or narrow retail parity clauses or equivalent commercial measures. They came into force last year.
There was no evidence to justify them, said the Court of Justice of the European Union (CJEU).
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“It has not been established that price parity clauses, whether wide or narrow, first, are objectively necessary for the implementation of that main operation and, second, are proportionate to the objective pursued by it,” judges said.
They noted the restrictions may reduce competition between various hotel reservation platforms, force out small platforms and entrants, and do not appear to be necessary to ensure Booking.com’s economic viability.
However, the court also said the clauses cannot be considered anti-competitive under EU antitrust laws.
“Price parity clauses cannot, in principle, be classified as ‘ancillary restraints’ for the purposes of EU competition law,” the CJEU noted.
Booking Holdings expressed disappointment with the ruling.
“We maintain that parity clauses that historically existed in Germany were necessary and proportionate to the relationship between accommodation partners, and Booking.com and that Booking.com operates in a competitive market,” the company said.
The case involving the unit of New York-listed Booking Holdings came after the company applied for a declaration on whether parity clauses are valid, prompting a Dutch court to seek the CJEU’s guidance. REUTERS
