Contentious legal battle: More than 10,000 lodging establishments filing lawsuits against Booking.com
Hotels Take Legal Action Against Booking.com Over Price Parity Clauses
In a significant move, more than 10,000 European hotels have joined forces in a class action lawsuit against Booking.com, challenging the use of "best price" or price parity clauses in contracts with hotels. These clauses, which have been a part of Booking.com's business practices for about two decades, prohibited hotels from offering rooms at lower prices on other platforms or their own websites.
The legal dispute stems from a ruling by the European Court of Justice (ECJ) in September 2024, which deemed these clauses anti-competitive and in violation of EU competition law. The ECJ found that such clauses reduced competition between different sales channels of hotel rooms, thereby harming a fair digital market. Consequently, the EU's 2024 Digital Markets Act (DMA) led Booking.com to abolish these clauses within the European Economic Area.
The hotels argue that these clauses deprived them of pricing freedom, limited direct bookings on their own websites, and caused unfair financial burdens and missed revenue opportunities for about 20 years. The case is being heard in Amsterdam, where Booking.com is headquartered.
Booking.com disputes wrongdoing, stating that the ECJ ruling was specific to a case in Germany between 2006 and 2016 and that the Amsterdam court should deliver the final judgment. However, the collective hotel industry, coordinated by associations such as HOTREC and supported by multiple national hotel groups, sees this lawsuit as a critical effort to restore fair competition and reduce excessive costs imposed by dominant online platforms.
Key Points
- Disputed clause: "Best price" or price parity clauses preventing hotels from offering lower prices elsewhere
- Legal finding: ECJ ruled these clauses violate EU competition law (Sept. 2024)
- Legislative context: Abolished due to EU Digital Markets Act (2024)
- Plaintiffs: Over 10,000 European hotels, coordinated by HOTREC and other associations
- Claims: Compensation for losses and stifled competition from 2004 to 2024
- Booking.com stance: Denies wrongdoing; final judgment pending in Amsterdam court
- Impact: Challenging platform power, restoring pricing freedoms, addressing unfair commission costs on hotels
This dispute illustrates growing regulatory scrutiny in the EU on dominant digital platforms and the balance of power between large online intermediaries and traditional service providers like hotels. The damage claims of the class action lawsuit relate to the period from 2004 to 2024. Platforms bring benefits to providers and guests, according to Norbert Kunz, CEO of the German Tourism Association (DTV), but competition should work and the rules should apply to everyone.
Booking Holdings holds a market share of 71% in the online booking portals segment across Europe. The Federal Court of Justice in Germany ruled in 2021 that best price clauses from Booking.com were not compatible with competition law. Proceedings against Booking.com and Expedia were initiated in Germany in 2015. The IHA CEO, Markus Luthe, stated that the class action is receiving overwhelming support. Booking.com's market share in Germany is 72.3% in the online booking portals segment.
The hotels apply to the Amsterdam court for compensation, aiming to recuperate losses from 2004 to 2024, as stipulated in their class action lawsuit against Booking.com. This legal battle, spurred by the European Court of Justice's 2024 ruling against price parity clauses, is an industry-wide effort to restore fair competition and address financing imbalances in the hotel business.
