{"id":2401,"date":"2019-06-06T17:02:53","date_gmt":"2019-06-06T15:02:53","guid":{"rendered":"https:\/\/www.d-kart.de\/?p=2401"},"modified":"2019-06-06T17:06:12","modified_gmt":"2019-06-06T15:06:12","slug":"olg-duesseldorf-booking-braucht-bestpreisklauseln","status":"publish","type":"post","link":"https:\/\/www.d-kart.de\/en\/blog\/2019\/06\/06\/olg-duesseldorf-booking-braucht-bestpreisklauseln\/","title":{"rendered":"The D\u00fcsseldorf Court: Booking needs \u2018most favoured nation\u2019 clauses"},"content":{"rendered":"\n

\u2018Most favoured nation\u2019\nclauses have been an antitrust battlefield for years with disputes in many\nEuropean countries. Now the D\u00fcsseldorf Higher Regional Court has decided in favour\nof a hotel booking platform in its Booking.com-decision. The case concerns\nnarrow \u2018most favoured nation\u2019 clauses in agreements between hotel booking\nplatforms and hotels. Adrian Deuschle reports. <\/em><\/p>\n\n\n\n


Narrow and wide MFN-clauses<\/strong><\/h2>\n\n\n\n

Booking.com brokers hotel rooms to consumers. If\na consumer does the booking with Booking, the platform earns a commission of\n10-15 % (according to the decision). Yet, if consumers circumvent the platform\nby making their booking directly via the hotel website, Booking is left empty\nhanded \u2013 even though consumers may have come across the hotel via the platform.\nTo prevent such \u201cfree-riding\u201d, the platforms operate with price parity clauses\nor most favoured nations (MFN) clauses in their agreements with hotels. With a wide\nMFN clause, the hotel agrees not to offer hotel rooms at more favourable\nconditions through any other distribution channel. With narrow MFN clauses,\nhotels are at least allowed to offer more favourable conditions on other platforms\nand offline distribution channels \u2013 yet not on their own websites. <\/p>\n\n\n\n


A European disarray<\/strong><\/h2>\n\n\n\n

The use of MFN clauses has been an issue in\nantitrust law for years with very different approaches. The antitrust\nauthorities in France, Italy and Sweden initiated investigations against\nBooking.com’s wide MFN clause. These investigations were buried after Booking agreed\nto use only narrow MFN clauses in future, essentially stipulating price parity\non the hotel\u2019s own website. These antitrust authorities approved of narrow MFN\nclauses. The Bundeskartellamt, however, did not accept commitments. It declared\nthe use of wide MFN clauses by HRS as unlawful, a decision confirmed by the D\u00fcsseldorf\nHigher Regional Court and now legally binding. In the aftermath of this\ndecision, Booking changed its contracts to narrow MFN-clauses. The Terms & Conditions say (our\ntranslation):<\/p>\n\n\n\n

\u201eThe hotel provides Booking.com with parity regarding rates and conditions. [\u2026]<\/p>

Rate and condition parity does not apply to prices and conditions:<\/p>

offered on other online reservation portals;<\/p>

offered through offline distribution channels, provided that such room rates are not published or marketed online and\/or are not published, provided that such room rates are not marketed online.\u201c<\/p><\/blockquote>\n\n\n\n

The Bundeskartellamt had seen this narrow\nclause as unlawful in its 2016-decision against Booking.com. The folks in Bonn\nproved to be stricter than elsewhere in Europe. The hotel platform was ordered\nto remove the narrow price parity clauses from its contracts. Booking fulfilled\nthis requirement, and according to an analysis by the Bundeskartellamt 72% of\nhotels in the sample actually undercut the Booking prices and\/or conditions on\ntheir website. Ingo Brinker, Christian Steinle and Ines Bodenstein of Gleiss\nLutz filed a complaint to the Higher Regional Court on behalf of the online platform.\nStake are high: The Higher Regional Court said the litigation was worth 5 mio.\nEuros. According to our information, other players joined the proceedings: HRS\nwith Christoph Stadler (Hengeler M\u00fcller), Expedia with Tilman Siebert (Reed\nSmith) and the Hotel Association with Volker Soyez (Haver Mail\u00e4nder). (Could Juve\nplease verify that?)<\/p>\n\n\n\n


Narrow MFN clauses are anticompetitive\u2026<\/strong><\/h2>\n\n\n\n

The D\u00fcsseldorf Senate, chaired by J\u00fcrgen K\u00fchnen\nwith judges Lohse and Poling-Fleu\u00df, decided in favour of the online travel agent\nplatform in its decision of 4 June 2019 (case VI-Kart 2\/16 (V)). According to\nthe court, narrow MFN clauses result in a restriction of competition within the\nmeaning of Art. 101 TFEU and \u00a7 1 of the German Act against Restraints of\nCompetition. They restrict the freedom of the hotel companies to set prices and\nthus impair competition on the online travel agent market as well as on the\nmarket for hotel rooms. As a result of the restriction on undercutting prices\nhotels will generally not offer lower prices to other platforms either, so the\nCourt says, since this would weaken their own online distribution channel.\nFurthermore, it weakens the market for hotel rooms. The possibilities for\nhotels to use “capacity management measures” are limited by the\nnarrow clauses. The clause prohibits hotels from offering favourable surplus\ncontingents for a short period only on their own websites.<\/p>\n\n\n\n


\u2026but do not violate competition law<\/strong><\/h2>\n\n\n\n

Despite the restrictive effects on competition as\nset out by the Court, the Senate excludes the narrow best price clauses from\nthe scope of the prohibition of anti-competitive agreements: Long live the German\n\u2018Immanenztheorie\u2019! There is case law in Germany on ancillary restraints, and\nthe Senate turns to this in order to exempt Booking from the prohibition of\nanti-competitive agreements. According to this reading, there is an unwritten\nexception to \u00a7 1 GWB (and also Art. 101(1) TFEU?) stating that such restraints\nthat are necessary for the implementation of a contract (i.e. immanent to the\ncontract) that \u2013 apart from this \u2013 is neutral for competition may not fall\nunder the prohibition. A further requirement is that these restrictions need to\nbe confined to what is absolutely necessary in terms of duration, geography and\nsubstance. (Other voices say that these constellations could also be resolved\nwith \u00a7 2 of the German Act against Restraints of Competition or Art. 101(3)\nTFEU, instead of referring to an unwritten restriction of the rules, but well.\nAfter all the Higher Regional Court offers an excellent summary of cases in\nwhich the German theory of ancillary restraints (so-called \u2018Immanenztheorie\u2019) has\nbeen applied so far.)<\/p>\n\n\n\n

\u201eThe agreement on rate and condition parity is necessary in order to guarantee a fair and balanced exchange of services between the parties involved, namely the portal operator and the contractually bound hotels as the buyers of the brokerage service, and it does not exceed what is necessary in terms of duration, geographic area or subject matter to achieve the objective.\u201c<\/em><\/p><\/blockquote>\n\n\n\n

The online portal providers invest into their\nplatforms by setting up the website and listing hotels. This \u201cadvance performance\u201d\nmay be counteracted if incentives were created to complete commission-free\nbookings on the hotel website. Offering more favourable conditions on one’s own\nwebsite would have a considerable pull effect on consumers against whom portal\noperators would have to protect themselves. In the opinion of the court, it is\nirrelevant whether this effect actually materialised. If price undercutting\nwere not to have a significant pull effect, narrow MFN clauses would\nconsequently not be a noticeable restriction of competition. If, on the other\nhand, the effect exists, the platforms must be able to protect themselves. The D\u00fcsseldorf\njudges call potential free-riding by hotels a “disloyal, unfair\nexploitation of the contractual efforts of Booking”.<\/p>\n\n\n\n

This is a surprise, at least in so far as the\ncourt in March 2017 had requested extensive follow-up investigations in these\nproceedings “into the significance and effects of the narrow \u2018most\nfavoured nation\u2019 clause”. As a result, the Bundeskartellamt had once again\ninvestigated vigorously. This does no longer seem to be a vital aspect of the\ncompetitive assessment.<\/p>\n\n\n\n


No less restrictive measures<\/strong><\/h2>\n\n\n\n

In the opinion of the court, it is not possible\nto find less restrictive clauses. Pay per click and listing fees are dismissed\nas feasible alternatives. Fees are not performance-related. These would reduce\nthe number of hotels listed with Booking and thus in the long run the\ncompetition between hotels, as well as market transparency for the customer\nwould be limited. <\/p>\n\n\n\n


Some perspectives<\/strong><\/h2>\n\n\n\n
\"\"<\/figure>\n\n\n\n

Should this decision from the judges, residing\nin D\u00fcsseldorf\u2019s Cecilienallee, close to the river Rhine, be the last word on price\nparity? Not quite. Don’t worry – the clauses will remain an issue. First it\nremains to be seen whether the Bundeskartellamt lodges an appeal against the\ndecision. (The Bundesgerichtshof or even the Court of Justice may want to have\na look at things\u2026). Should the decision become legally binding, the hotel\ncompanies may be confronted with narrow clauses in the future again.<\/p>\n\n\n\n

At the European level, the matter is far from\nover:  In some Member States<\/a>, the legislator<\/a> has already taken action and has\ndeclared price parity clauses illegal. The Commission has not yet taken a clear\nposition. Neither the monitoring report<\/a> nor the Final Report on the e-commerce\nsector inquiry<\/a> have\ncontributed to clarification. MFN clauses are also an issue of EU platform-to-business-regulation<\/em>.<\/p>\n\n\n\n

Anyway, the decision offers an exciting read for\nthose who are interested in issues of the digital economy. Who actually benefits\nfrom the platform economy? Just one example from the reasoning is the analysis\nof where customers actually book their hotel rooms: Of those who find their\nhotel via Google 47% move to the hotel website to do the booking, 38% proceed\nto Booking and 11% to German rival HRS. Numbers look different if you search\nvia Check24 or Trivago. Interpretation: Up to you. While in the recent past the\nplatforms came under heavy pressure in the public discussion, this very\ninfluential Senate is now highlighting their positive effects. How do you\nprotect the competitive process in this area? Do you side with the hotels that\nhave made themselves dependent on Booking? Or do you favour the platform that\nhas opened up an efficient sales channel with great opportunities even for\nsmall companies \u2013 but may also be able to exert considerable pressure?<\/p>\n\n\n\n

The Court only briefly looks at the allegation\nof abuse of market power. It is left open whether Booking is dominant or at least powerful. If a clause is\nnecessary, as the Court says, to guarantee a fair exchange of services, it\nshould be available to a dominant player. The company itself describes itself\nas \u201ethe world\u2019s leading provider of\nonline travel and related services\u201c<\/a> (as of 6 June 2019 \u2013 at some point, the\ncompliance department will erase such claims of dominance). Let’s see whether\nthe world market leader can now fully enforce the narrow MFN clauses with hotels\nin Germany.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u2018Most favoured nation\u2019 clauses have been an antitrust battlefield for years with disputes in many European countries. Now the D\u00fcsseldorf Higher Regional Court has decided in favour of a hotel booking platform in its Booking.com-decision. The case concerns narrow \u2018most favoured nation\u2019 clauses in agreements between hotel booking platforms and hotels. Adrian Deuschle reports. Narrow and wide MFN-clauses Booking.com brokers hotel rooms to consumers. If a consumer does the booking with Booking, the platform earns a commission of 10-15 %…<\/p>\n

Read More Read More<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":2404,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[278,277,279,280,96],"class_list":["post-2401","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-allgemein","tag-bestpreisklausel","tag-booking","tag-kartellverfahren","tag-kuehnen","tag-olg-duesseldorf"],"translation":{"provider":"WPGlobus","version":"3.0.0","language":"en","enabled_languages":["de","en"],"languages":{"de":{"title":true,"content":true,"excerpt":false},"en":{"title":true,"content":true,"excerpt":false}}},"_links":{"self":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts\/2401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/comments?post=2401"}],"version-history":[{"count":7,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts\/2401\/revisions"}],"predecessor-version":[{"id":2414,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts\/2401\/revisions\/2414"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/media\/2404"}],"wp:attachment":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/media?parent=2401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/categories?post=2401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/tags?post=2401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}