Narrow 'best price' clauses of Booking also anticompetitive
Today the Bundeskartellamt prohibited Booking (Booking.com Deutschland GmbH, Berlin, and Booking.com B.V., Amsterdam) from continuing to apply its 'best price' clauses and ordered the hotel booking portal to completely delete the clauses from its contracts and general terms and conditions by 31 January 2016 as far as they affect hotels in Germany.
Under the clauses the hotels were obliged to always offer the hotel booking portal their lowest room prices, maximum room capacity and most favourable booking and cancellation conditions available on all online and offline booking channels (wide best price clause). During the proceedings the company had offered to introduce a modified 'best price' clause. Under this clause Booking allows the hotels to offer their rooms cheaper on other hotel booking portals but still prescribes that the prices which they display on their own websites may not be lower than on Booking's hotel portal (narrow best price clause). Booking implemented this amended form of 'best price' clauses in Germany in July 2015.
Andreas Mundt, President of the Bundeskartellamt:
"These so-called narrow best price clauses also restrict both competition between the existing portals and competition between the hotels themselves. Firstly they infringe the hotels' freedom to set prices on their own online sales channels. There is little incentive for a hotel to reduce its prices on a hotel booking portal if at the same time it has to display higher prices for its own online sales. Secondly, it still makes the market entry of new platform providers considerably difficult. The 'best price' clauses barely provide an incentive for the hotels to offer their rooms on a new portal cheaper if they cannot implement these price reductions on their own websites as well. There is no apparent benefit for the consumer."
In January 2015 the Düsseldorf Higher Regional Court confirmed the Bundeskartellamt's decision that the 'best price' clauses of Booking's competitor HRS are illegal (see Bundeskartellamt press release of 9 January 2015). Nevertheless Booking initially maintained its 'best price' clauses.
At the end of March 2015 the Bundeskartellamt already made it clear to Booking in a statement of objections that its offer to reduce the scope of its 'best price' clauses was insufficient to allay competition concerns.
Booking can appeal against the Bundeskartellamt's decision to the Düsseldorf Higher Regional Court and apply for interim relief against the immediate enforceability of the order.
The Bundeskartellamt will continue its current proceeding against the 'best price' clauses of Booking's competitor Expedia.
The authority remains in close contact with the European competition authorities also conducting proceedings in this context and the European Commission and will participate in the coming year in an evaluation of different measures which the competition authorities have undertaken on the European hotel portal markets.