Booking.com will no longer require European hotels to offer it better room prices
- 21 April, 2015 22:07
Europe's largest hotel reservation site Booking.com has settled antitrust cases against it in Sweden, Italy and France over contractual clauses it used to oblige hotels to offer it the same room prices as competitors, or better.
The three competition authorities had concerns that these so-called parity clauses could restrict competition between Booking.com and other online travel agents, while at the same time they also might prevent other hotel reservation companies from entering the market.
Booking.com made commitments to change its contractual terms in December and has since then adjusted the original commitments after a review by hotels, said the European Commission, which coordinated the investigation between the three authorities.
The new commitments primarily mean that Booking.com must allow hotels to sell their rooms cheaper via its competitors, restoring competition between online travel agencies, the Swedish Competition Authority said.
In addition, Booking.com will also allow hotels to offer lower room rates via offline channels, provided that these rates are not published or marketed online. It also agreed not to restrict the non-public room rates that hotels offer, as long as they are not marketed online, the commitments showed.
Booking.com though may still require hotels to offer it the same room prices as hotels do on their own sites, or better.
Booking.com will also specify that the number of rooms available shown on its site is the number on its own site alone, to prevent the suggestion that a hotel is close to be fully booked when it is actually not. It will also stop requiring it should get as many rooms as its competitors.
"They made substantial improvements to the commitments from the previous round," said Martin Mandorff, head of the Abuse and Vertical Restraints Unit at the Swedish Competition Authority, who added that the commitments solved the competition concerns.
The commitments were also welcomed by the Italian antitrust authority, which said they strike the right balance for consumers in France, Italy and Sweden, restoring competition while at the same time preserving user-friendly free search. In Italy, a similar proceeding was also opened against hotel booking site Expedia which is still pending, the authority said.
The French competition authority also welcomed the new commitments.
The commitments will be implemented as of July 1 this year and were made for five years. The French competition authority will review the effectiveness of the commitments before the start of 2017.
Meanwhile, several other national competition authorities in Europe have been keeping a close eye on the developments and are considering the possibility of extending these commitments to their own markets, the French authority said, adding that in France investigations into Expedia and hotel reservation service HRS will continue.
Booking.com did not manage to please all European antitrust authorities though. Earlier this month, the German antitrust authority decided to take a different path and filed formal antitrust charges against Booking.com prohibiting the continued use of 'best price' clauses.
Although the various competition authorities have used different tools, the effect is the same, as the anti-competitive clause has disappeared, a European Commission spokesman said during a Brussels news conference, welcoming the similar outcomes.
Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to firstname.lastname@example.org