Did your hotel receive guests via Booking.com between 2004 and 2024?

Booking.com introduced the wide parity clauses across Europe in 2004. Under the regime of these wide parity clauses hotels in Europe were prevented from offering lower rates or better conditions on any other distribution channel than on the Booking.com platform.

After the intervention of several European competition authorities, in July 2015 Booking.com reduced the scope of the parity clauses from “wide” parity clauses to “narrow” parity clauses. Since then, hotel partners were in principle allowed to offer lower rates or better conditions on other Online-booking platforms (OTAs). They were, however, still prevented from offering lower rates or better conditions on their own direct (online) distribution channels.

On 22 December 2015 the German Federal Cartel Office (FCO) found that the narrow parity clauses were in violation of European competition law and issued a prohibition decision against Booking.com. According to the FCO’s findings, the parity clauses restrict (price) competition between Booking.com and the other OTAs, undermine the hotels’ direct sales channels, produce foreclosure effects, and thereby foster the increasing market concentration in the OTA market. The FCO’s decision of 22 December 2015 was fully upheld by the German Federal Supreme Court in a ruling of 18 May 2021.

In subsequent parallel proceedings in the Netherlands, in early 2023 the District Court of Amsterdam had to rule on the same question, i.e. whether the parity clauses used by Booking.com complied with EU competition law. The District Court of Amsterdam was hesitant to just follow the case law from Germany but rather decided to submit the relevant questions to the European Court of Justice for a preliminary ruling.

With its judgment of 19 September 2024, the ECJ has basically confirmed that the wide and narrow parity clauses used by Booking.com indeed violate EU competition law.

In compliance with the Digital Markets Act, Booking.com announced in June 2024 that it would eliminate all parity clauses from its general terms and conditions in Europe as from July 2024.

The parity clauses used by Booking.com had the effect of restricting competition to the detriment of hotels. In the first place, the parity clauses eliminated price competition between the OTAs, which resulted in artificially inflated commission levels. Secondly, the parity clauses restrained the hotels’ – far less expensive – direct distribution channels. And thirdly, the parity clauses impeded the market entry of new OTAs and forced smaller OTAs out of the market, hence provoking a continuous oligopolization of the OTA market. All this was investigated in detail by the FCO in its proceedings against Booking.com and confirmed by the German Federal Supreme Court.

Hence, the hotels’ damages resulting from the application of the anti-competitive parity clauses by Booking.com are multi-dimensional. A preliminary assessment indicates that hotels might recover up to 30% or more of the total commissions paid to Booking.com since 2004 plus interests.

• By suing Booking.com at its seat in the Netherlands the hotels would avoid any discussion on international jurisdiction.
• It is possible to bundle the claims of all European hotels in one single forum, which would not only result in significant synergies of scale and scope but would also expose Booking to significant financial liability.
• The Amsterdam District Court is probably the most experienced court in Europe in the field of collective antitrust damage actions. It is already familiar with the matter and handles the proceeding in the parallel (still pending) litigation between German hotels and Booking.com very competently and smoothly. There is no reason to doubt that the court will deal with any subsequent action for damages the same way.

Thus, with the present collective action initiative, HOTREC envisages to bundle the claims of the affected hotels in Europe by way of assignment to a Dutch “Stichting” (Foundation) which will enforce them jointly in the Netherlands.

The interests of the participating hotels are well protected as representatives of the hotel industry will sit on the Stichting´s advisory board. The Stichting will be supported by experienced professionals.

Due to the assignment of claims to the Stichting, affected hotels are not direct parties in the potential litigation against Booking.com and do not have to bear any costs or costs risks. Instead it is the Stichting that will assert all assigned claims in its own name and at its own risk. Besides a potential legal action the Stichting will try to obtain a fair amicable settlement with Booking.com. Due to the collective approach covering hotels across all European jurisdictions, the Stichting will have a strong position in such negotiations.

The initiative will be lead by Dr. Volker Soyez of SGP Schneider Geiwitz & Partner, the lawyers that have successfully represented hotels and hotel associations before the European Court of Justice as well as national courts and competition authorities. In the legal proceedings in the Netherlands, the Stichting will in addition be represented by litigation experts Theodoor Verheij and Bas Lem of the law firm Brande & Verheij LLP.

The economic experts are Prof. Maarten Pieter Schinkel, one of the most renown economic experts with vast experience in antitrust damage litigation before Dutch and European courts, and Ulrich Laitenberger, an Associate Professor who has extensively researched and published on parity clauses. The overall case management and strategy is supported by Dr. Till Schreiber and Dr. Christian Classen of CDC Cartel Damage Claims, the European pioneer and leader in collective claims enforcement in the field of competition law.