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
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
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
"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
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.