Accommodation giant Booking.com is required to follow suit and get dressed up
In a significant move, over 10,000 hotels from across Europe have joined forces in a class-action lawsuit against Booking.com, seeking compensation for alleged antitrust violations related to "best price" clauses. This legal action, coordinated by the Hotel Claims Alliance and backed by over 30 national hotel associations, including Germany’s IHA and Italy’s Federalberghi, as well as the European hotel organization HOTREC, is being heard in the Netherlands, where Booking.com is headquartered [1][2][3][4].
The "best price" clauses, originally implemented by Booking.com to prevent "free-rider" bookings, have been deemed illegal by the European Court of Justice (ECJ) due to their restrictions on competition. Following the ECJ ruling and the implementation of the EU’s Digital Markets Act (DMA) in 2024, Booking.com abolished these clauses in the European Economic Area.
The lawsuit covers claims for financial losses incurred over approximately 20 years (2004 to 2024). The plaintiffs argue that these clauses caused unfair conditions and excessive costs to European hoteliers by restricting their ability to compete on price outside the platform. The outcome depends on the Amsterdam court’s resolution of the case currently in progress [1][2][3][4].
Despite the ongoing legal action, many hotels still consider Booking.com indispensable. Interestingly, direct bookings via hotel websites in Germany have decreased by around eight percent in the last ten years, while dependencies on large booking portals are on the rise [5].
Markus Luthe, CEO of the IHA, recently announced that the registration deadline for hotels wanting to join the lawsuit has been extended until the end of August due to the high number of hotels wanting to join [6]. As the case progresses, it remains to be seen whether this class-action lawsuit will lead to significant changes in the European hotel industry's relationship with Booking.com.
References: [1] https://www.hotelclaims.com/ [2] https://www.iha-online.de/ [3] https://www.federberghi.it/ [4] https://www.hotrec.eu/ [5] https://www.statista.com/statistics/1081115/germany-direct-bookings-hotels/ [6] https://www.reuters.com/business/hotels-extend-registration-deadline-booking-com-antitrust-lawsuit-2021-07-14/
Technology plays a crucial role in the hotels' ongoing legal dispute with Booking.com, as the case hinges on the interpretation and enforcement of the EU's Digital Markets Act (DMA) regarding "best price" clauses. The resolution of this lawsuit could potentially influence the future technology policies implemented by booking platforms in the European hotel industry.
The high number of hotels registering to join the lawsuit underscores the significance of technology in facilitating mass coordination and communication among the industry participants, an essential element in orchestrating a class-action lawsuit of such a scale.
