Tightening the siege against parity clauses in hotel distribution contracts

The European Commission has announced the launch of a market test in the antitrust investigations initiated by the French, Swedish and Italian competition authorities in the online hotel booking sector. For its part, the German courts have just set a precedent that could act as a domino effect in other countries. In any case, the hotel employers' association does not rule out taking legal action.

 

The committee of experts in digital distribution of HOTREC, the European hotel employers' association, of which the Spanish Confederation of Hotels and Tourist Accommodation (CEHAT) is an active member, is due to decide next week whether to initiate legal action at the EU level to have the competition authorities ban the parity clauses for the entire EU territory;legal action at Community level so that the competition authorities ban the parity clauses for the entire EU territory, or wait for a domino effect in the different countries after the legal precedent set in Germany.

Last Friday, January 9, the High Court of Justice of Düsseldorf dismissed the appeal of the hotel booking portal HRS against the decision of the German federal competition agency (Bundeskartellamt) regarding the so-called MFN clauses, among which are the clauses of price parity and, in general, of better conditions with respect to competitors.

These clauses, which the hotel employers consider abusive, are imposed in many cases by online room booking portals on hotel chains and individual establishments, preventing them from giving better conditions to the end customer or to other online portals.

On December 20, 2013, the German competition agency had banned HRS from using MFN clauses in its contracts with hotels. The aforementioned clauses were mandatorily imposed by the distribution partners to maintain identical rates for the same room type and identical booking conditions in all online and offline channels.

The German competition agency had concluded that these MFN clauses constitute a clear violation of German and European competition law. Since March 2014 HRS has not applied the aforementioned clauses in contracts with hotels in Germany. HRS filed an appeal against this prohibition by the German competition agency with the High Court of Düsseldorf, which éis has been dismissed.

In parallel to the court proceedings against HRS, the German competition agency is investigating at the behest of the complaint filed by the German hotelier the terms of the MFN clauses in the contracts of Booking.com and Expedia.

The HOTREC Commission of experts in digital distribution, of which La Confederación Española de hoteles (CEHAT) is an active member, should decide next week whether to initiate legal action;at European level so that European competition prohibits the parity clauses for the entire territory of the European Union or, on the contrary, it chooses to trust that the aforementioned domino effect  end up prohibiting, at different speeds, the parity clauses.