Bundeskartellamt issues statement of objections regarding Booking.com's 'best price' clauses
Today the Bundeskartellamt has informed Booking.com Deutschland GmbH, Berlin, of its competition concerns regarding the continued use of 'best price' clauses in its contracts with hotels in Germany. This step became necessary because the hotel booking portal had continued to use its 'best price' clauses although the Bundeskartellamt's prohibition decision in the parallel proceedings against HRS (see press release of 09.01.2015) had been confirmed by the Düsseldorf Higher Regional Court. Under the 'best price' clauses the hotels are obliged to always offer the hotel portal their lowest room prices, maximum room capacity and most favourable booking and cancellation conditions available on the Internet.
Andreas Mundt, President of the Bundeskartellamt: "
By confirming our decision against HRS the Düsseldorf Higher Regional Court has decided an issue of principle in relation to restrictions of competition in the Internet. Nevertheless the other large hotel portals, Booking.com and Expedia, have so far not been prepared to eliminate the 'best price' clauses from their contracts. For this reason the Bundeskartellamt will now first prohibit the continued use of 'best price' clauses by Booking.com which has meanwhile become the largest hotel booking portal in Germany. This is also to establish homogeneous competitive conditions as HRS already stopped using its 'best price' clauses in hotel contracts a year ago. The current proceedings against Expedia will continue."
'Best price' clauses are only beneficial to the consumer at first glance because ultimately they restrict competition between the hotel booking platforms. Booking portals which demand lower commissions from the hotels cannot offer lower hotel prices. This also makes the entry of new platforms to the market more difficult.
As HRS has not appealed the decision of the Düsseldorf Higher Regional Court on points of law to the Federal Court of Justice, the Bundeskartellamt's decision has now become final. The Bundeskartellamt's statement of objections gives Booking.com the opportunity to review its position on the issue. In line with the Düsseldorf Higher Regional Court’s decision in the parallel proceedings against HRS the Bundeskartellamt regards Booking’s proposals for a compromise (commitments) as insufficient. In view of the fact that the use of best 'price clauses' by HRS has been prohibited in a final and non-appealable judgement a less stringent course of action against the market leader Booking.com does not appear to be the right approach in Germany.
Several other European competition authorities are currently conducting proceedings regarding 'best price' clauses used by hotel booking platforms in contracts with hotels based in their countries. The Bundeskartellamt maintains close contact to these authorities and the European Commission.