HRS's ‘best price’ clauses violate German and European competition law - Düsseldorf Higher Regional Court confirms Bundeskartellamt’s prohibition decision
Today the Düsseldorf Higher Regional Court rejected HRS's appeal against the Bundeskartellamt's decision of 20 December 2013. In its decision the authority had prohibited HRS from continuing to apply its ‘best price’ clause and at the same time initiated proceedings against the hotel booking portals Booking and Expedia for applying similar clauses in their contracts with their hotel partners (see press release of the Bundeskartellamt of 20.12.2013). 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 the Düsseldorf Higher Regional Court has decided on a fundamental issue concerning restrictions of competition in online sales. ‘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 commission from the hotels cannot offer lower hotel prices. The clauses also make the entry of new platforms to the market more difficult. Consumers therefore benefit directly from the court's decision. Competition between the portals for lower hotel room prices or favourable cancellation conditions will increase. It will be easier for new hotel booking portals with innovative services to enter the market. We will now quickly pursue our current proceedings against the ‘best price’ clauses of Booking and Expedia, HRS's competitors."
In the case at hand the Düsseldorf Higher Regional Court has confirmed that HRS's ‘best price’ clauses restrict competition to such a degree that they cannot be exempted under the TFEU Block Exemption Regulation or as an individual exemption. Many other competition authorities in Europe are also currently conducting proceedings against hotel booking platforms on account of ‘best price’ clauses. The Bundeskartellamt is maintaining close contact with these authorities and the European Commission.
Andreas Mundt: "The decision of the Düsseldorf Higher Regional Court is the first of a national court which can serve as an orientation for the proceedings currently conducted by our European colleagues."
HRS can appeal the decision of the Düsseldorf Higher Regional Court on points of law to the Federal Court of Justice.