Estimated expenses for the upcoming holiday:
European Hotels Take Legal Action Against Booking.com Over Antitrust Violations
A large-scale class-action lawsuit is underway against Booking.com, involving over 10,000 hotels across Europe. The legal action, led by the Hotel Association Germany (IHA), alleges antitrust violations caused by "best price" parity clauses that restricted competition and led to significant financial damage.
The European Court of Justice (ECJ) ruled on September 19, 2024, that these parity clauses were illegal under EU competition law. Consequently, hotels were prevented from offering their rooms cheaper elsewhere, such as on their own websites. The lawsuit seeks compensation for two decades of alleged unfair pricing restrictions and inflated commissions, dating back to 2004.
The case, coordinated by the European Hotel Alliance HOTREC and national hotel associations, is being conducted in the Dutch courts, where Booking.com is headquartered. The deadline for hotels to join the collective action has been extended until August 29, 2025.
The IHA CEO, Tobias Warnecke, stated that parity clauses eliminated price competition between Booking.com and other online platforms. He believes that the infringement-related price increase was at least 30 percent for participating hotels.
Under Dutch law, damages for unlawful acts must be paid with compound interest. This means that affected hotels have a claim for damages for financial losses incurred under European competition law. Participating hotels can reclaim at least 30 percent of the commissions paid to Booking.com between 2004 and 2024, plus interest.
Booking.com had already abolished these clauses in the European Economic Area last year due to an EU Digital Law. However, the IHA sees European hotels as significantly disadvantaged in competition over the past years due to these parity clauses.
If successful, this lawsuit could have serious consequences for Booking.com. The infringement of the parity clauses dates back up to 20 years, which could be problematic for the company. The judges ruled that platforms like Booking.com could exist economically without such provisions.
For future holidays, it's recommended to check the hotel's own website as the desired room might actually be cheaper there. This lawsuit represents one of the largest collective legal efforts in the European hospitality sector aimed at addressing restrictive digital market practices enforced by an online booking platform.
This legal battle could potentially heat up many computer keyboards in the future as the case progresses. Stay tuned for further updates on this significant development in the European hospitality industry.
[1] European Hotel Alliance HOTREC press release, 2024. [2] IHA press release, 2024. [3] ECJ ruling, 2024. [4] Various hotel association press releases from 2024. [5] Hotel Claims Alliance press release, 2024.
- In light of the ongoing legal action, travelers might find attractive deals-and-discounts by directly booking hotels on their websites, rather than relying on online booking platforms like Booking.com.
- As European hotels strive to recover from two decades of alleged antitrust violations, lifestyle enthusiasts could have increased opportunities for unique travel experiences once the lawsuits seeking compensation for financial damages are resolved.
