The German Federal Court of Justice ruled on May 19 that German hoteliers Booking.com can no longer be prevented from advertising lower room rates on their own websites. A German court has declared such a practice to be unfavorable business conditions.
Thus Booking.com will no longer be allowed to prevent hotels in Germany from advertising lower room rates on their own websites. Hotels in Germany will now be able to offer better prices through their own websites on or through direct booking, if they wish, for the benefit of hotels and consumers.
"The ruling of the German court says that the clauses on narrow price parity are incompatible with competition rights. This is a breath of fresh air for hoteliers in Germany, who will have much-needed freedom in setting their own pricing strategies and lifting the disincentive effect on their digitization. We hope that the verdict will set an important precedent for other European markets ”, Said the general manager of the German association of hoteliers HOTREC Marie Audren and added that HOTREC welcomes the German Federal Office for the Suppression of Cartels for ensuring that competition law is respected and developed through evidence showing the anti-competitive nature of price parity clauses.
Namely, Hotelverband Deutschland (IHA) initiated proceedings against Booking.com with an appeal in autumn 2013, and in the termination and waiver order issued on December 22, 2015, the Federal Office banned the booking portal from further using the best price clause. No, Booking com appealed the decision and in 2019, the Dusseldorf Regional Court dismissed the IHA's lawsuit. This was followed by an appeal from hoteliers, and the latest decision ruled in favor of hoteliers, and Booking.com will no longer be able to prevent hotels in Germany from advertising lower room rates on their own websites.
In Europe, bans on the “parity pricing regime” clause are banned by law in Austria, Belgium, France and Italy, and now in Germany, and Switzerland is expected to be the next European country to ban such practices.
You can read the decision HERE
I have written before how Booking.com and Airbnb, as the largest global players in the booking market so far, have looked only at themselves and how they have to take responsibility. Their reputation is threatened, and thus their long-term business model. While Airbnb is slowly changing, Booking com still adheres to the role of a monopolist without any sense of the market i.e. partners. Also, this is another step forward for the digitalization of the tourism industry, where hotels in the past many years have begun to strengthen their digital departments, communication and forcing direct booking.
Photo: Rachel Claire, Pexels.com