EU Launches Market Tests in Investigations in Online Hotel Booking Sector by French, Swedish and Italian Competition Authorities

The European Commission has announced the launch of market tests in antitrust investigations by the French, Swedish and Italian competition authorities in the online hotel booking sector.

According to an announcement by the Commission, the three national competition authorities have concerns that so-called “parity clauses” in contracts between online travel agent Booking.com and hotels may have anti-competitive effects, in breach of EU and national antitrust rules. Booking.com has proposed commitments to remedy these concerns, which – if the market tests confirm their adequacy – the national competition authorities can make legally binding on Booking.com. The Commission is coordinating the national investigations but has not opened its own investigation.

The parity clauses in the contracts between Booking.com and hotels oblige the hotel to offer Booking.com the same or better room prices as the hotel makes available on all other online and offline distribution channels.

The French, Swedish and Italian competition authorities consider that these clauses may harm competition, in breach of their respective national competition laws as well as Article 101 and/or Article 102 of the Treaty on the Functioning of the European Union (TFEU). In particular, they have concerns that they may restrict competition between Booking.com and other online travel agents (OTAs) and hinder new booking platforms from entering the market.

To alleviate these concerns, Booking.com has proposed to abandon the parity requirement in respect of prices which the hotel makes available to other OTAs. This would enable hotels to offer different room prices to different OTAs. However, the hotel would still have to offer the same or better room prices to Booking.com as are offered on the hotel’s own online and offline booking channels. The commitments are intended to apply EEA-wide.

The French, Swedish and Italian competition authorities are continuing their investigations into the parity clauses of other OTAs.

The Commission informed that comments on the proposed commitments can be submitted to the relevant national competition authorities until 31 January 2015 inclusive.