European Court criticises Booking.com's pricing restrictions on hotels
Booking.com, the Dutch accommodation platform, has come under scrutiny from the European Court of Justice for pushing the limits of European competition law. The court issued a ruling on Thursday criticising Booking.com's practice of prohibiting hotels from offering lower prices through other sales channels.
While Booking.com allows hotels to list rooms on alternative platforms, the company has historically barred them from offering rooms at lower rates elsewhere. Initially, this applied to offers made on both competing platforms and the hotels' own websites. Since 2015, however, the ban has only covered prices listed on hotels' own channels.
Multiple challenges
This practice was challenged when a German court ruled that such provisions violated European competition rules. Booking.com responded by filing a claim with a court in Amsterdam, where the company is headquartered, seeking to have the restrictions deemed legally valid. The Amsterdam court, referred the case to the European Court of Justice for a preliminary ruling.
In its decision, the European Court acknowledged the positive impact platforms like Booking.com have had on competition. "Consumers can now quickly and easily find hotels and compare prices," the court noted. However, it argued that the pricing restrictions imposed on hotels are not essential for the platform's business model.
By preventing hotels from offering lower prices on other platforms, Booking.com appears to be stifling competition, particularly for smaller and emerging players in the market.
While the court recognised that preventing hotels from undercutting Booking.com on their own websites might be justified, it concluded that such a restriction is not "objectively necessary to ensure the economic viability of the hotel reservation platform".
© PHOTO KIM VAN DAM/ANP/HOLLANDSE HOOGTE
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