National Competition Authorities launch parallel market tests in online hotel booking sector

By Gabriele Accardo

Last 15 December 2014 the European Commission announced the launch of market tests by the French, Swedish and Italian competition authorities in the online hotel booking sector. The Commission is coordinating the national investigations but has not opened its own investigation.

The investigations concern the parity clauses in the contracts between Booking.com and hotels that oblige the hotel to offer Booking.com the same or better room prices that the hotel makes available on all other online and offline distribution channels.

The three national competition authorities have concerns that so-called “parity clauses” in contracts between online travel agent Booking.com and hotels may have anti-competitive effects, in breach of their respective national competition laws as well as Article 101 and/or Article 102 of the Treaty on the Functioning of the European Union (TFEU). In particular, they have concerns that they may restrict competition between Booking.com and other online travel agents (“OTAs”) and hinder new booking platforms from entering the market.

To alleviate these concerns, Booking.com has proposed to abandon the parity requirement in respect of prices which the hotel makes available to other OTAs. This would enable hotels to offer different room prices to different OTAs. However, the hotel would still have to offer the same or better room prices to Booking.com as are offered on the hotel’s own online and offline booking channels. The commitments (see commitments in France, Italy and Sweden) are intended to apply EEA-wide.

The French, Swedish and Italian competition authorities are continuing their investigations into the parity clauses of other OTAs.

Interested parties could submit comments to the relevant national competition authorities until last 31 January 2015.

As it may be recalled seven competition authorities in Europe (in France, Germany, Sweden, UK, Italy, Austria, Ireland) have opened cases concerning online booking platforms (see, e.g., Newsletter 3/2014, p.12 Newsletter 1/2014, p.15, Newsletter 5-6/2013, p.9 and 11, Newsletter No. 4-5/2012, p. 15, for additional background).

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