Hotel Uprising against Booking.com's Dominance
European Hotels Pursue Class Action Lawsuit Against Booking.com Over "Best-Price" Clauses
European hotels are taking legal action against Booking.com, alleging that the company's "best-price" or "parity" clauses have restricted their price sovereignty, limited competition, and displaced direct bookings.
The initiative, coordinated by the Hotel Claims Alliance foundation, has gained support from the European hotel alliance Hotrec and over 30 national associations, including the German Hotel Association (IHA). The damage claims of the class action lawsuit relate to the period from 2004 to 2024.
The central point of contention is the "best-price" clauses, which prohibited hotels from offering lower room rates outside Booking.com’s platform, including their own official websites. These clauses maintained Booking.com’s price monopoly on hotel listings and were justified by the company as a way to prevent customers from bypassing their platform after discovering hotels there.
In 2021, the Federal Court of Justice in Germany ruled that these clauses were not compatible with cartel law. The European Court of Justice further strengthened the case for hotels when it ruled in September 2024 that such best-price clauses are illegal under EU competition law because they restrict fair competition and limit hotels’ freedom to set prices independently.
Booking.com abolished these clauses in Europe following this ruling and regulatory pressure from the EU’s Digital Markets Act of 2024. However, the European hotel associations argue that these clauses caused excessive costs and lost revenue for hotels over the past two decades.
Despite Booking.com's denial of having received a filed class action lawsuit, the company is facing proceedings initiated against it and Expedia in 2015 in Germany. In Germany, the Federal Cartel Office prohibited the use of best price clauses by HRS in 2013.
The registration deadline for hotels has been extended to August 29 due to the great response. Over 10,000 hotels, including those from Germany, are demanding compensation from Booking.com for restricting price competition for approximately two decades.
It is worth noting that direct bookings still account for the largest share of the overall market at 50.9%. In 2023, 29.1% of all overnight stays in Europe were handled through online booking portals, with Booking Holdings holding a market share of 71%.
Norbert Kunz, CEO of the German Tourism Association, stated that competition in the vacation rental market leads to lower prices and reflects the diversity of German tourism. The outcome of this class action lawsuit could have significant implications for the online booking industry and the competitive landscape of the European hotel market.
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- The European hotel industry, led by associations like the Hotel Claims Alliance foundation, Hotrec, and the German Hotel Association (IHA), is seeking financial compensation from Booking.com, alleging that the company's "best-price" clauses, which restricted their price sovereignty and limited competition, have resulted in excessive costs and lost revenue in the business sector over the past two decades.
- The technology sector, specifically online booking platforms like Booking.com and Expedia, is facing a legal battle over the use of "best-price" clauses, with European hotels arguing that these clauses violate competition laws and have negatively impacted their ability to set prices independently in the finance and business sectors.
