Agent Issues Germany orders Booking.com to alter best-price terms for hotels By Jamie Biesiada / December 23, 2015 Share 1 -- Germany’s competition regulator, the Bundeskartellamt, said it will prohibit Booking.com from applying “best price” clauses and ordered them to be deleted from contracts and general terms and conditions that affect hotels in Germany by the end of January. Priceline Group, parent of Booking.com, said it plans to appeal the ruling. Initially, the clauses required hotels to offer Booking.com their lowest room prices, maximum room capacity and most favorable booking and cancellation conditions available on online and offline booking channels, but Booking.com offered a modified clause earlier this year, according to the Bundeskartellamt. The modified clauses — referred to as “narrow best price clauses,” versus the initial “wide best price clauses” — allowed hotels to offer cheaper rooms on other OTAs but states the prices they display on their own websites may not be lower than those on Booking.com. The modified clauses were enacted in Germany in July.According to Booking.com, competition authorities in France, Italy, Sweden, Ireland, the United Kingdom, Poland, Greece, Denmark, Hungary, the Netherlands and Switzerland all voiced support of the price clause changes that Booking.com made. French, Italian and Swedish competition authorities found that the changes would promote a more competitive environment for online travel companies, benefiting both hotels and consumers.The German authority, however, has ruled differently.“These so-called narrow best price clauses also restrict both competition between the existing portals and competition between the hotels themselves,” Bundeskartellamt president Andreas Mundt said in a statement.Mundt cited an infringement on hotels setting prices on their own online booking channel as well as making it difficult for new platform providers to enter the market.“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,” he said. “There is no apparent benefit for the consumer.”According to the Bundeskartellamt, last January a German court ruled that best-price clauses of a Booking.com competitor, HRS, were illegal, but Booking.com initially maintained its best price clauses. The Bundeskartellamt issued a statement of objections in March to Booking.com, making it clear that the reduction in scope of its best-price clauses was not sufficient.Wednesday’s decision can be appealed to the same German court, and Booking.com can also apply for interim relief.“We believe this decision is flawed because it does not recognize the immense benefits that online travel brands like Booking.com bring to both consumers and accomodations,” Gillian Tans, president of Booking.com, said in a statement. “Companies like ours bring transparency, choice and value to global travelers by aggregating information for hundreds of thousands of properties. "We do not only save consumers time and money, we serve as a highly cost-efficient marketing channel for most hotels that could not otherwise afford to market their brand to domestic and international consumers. Narrow parity was put in place to ensure that consumers don’t have to check hundreds of hotel websites in order to get the best price, allowing sites like Booking.com and others to achieve advertising efficiencies on behalf of hotels.”Booking.com alleges the Bundeskartellamt “failed to conduct a proper investigation of the competitive effects” of the amended best-price clauses, and that the authority relied too heavily on the HRS case without considering evidence submited by Booking.com.The booking portal said it will cooperate with the German authority’s ruling pending the outcome of its appeal. Elsewhere in Europe, the narrow best-price clauses will remain.The Bundeskartellamt said it will continue its current proceeding against Expedia’s best-price clauses.