Thousands of hotels file a collective grievance against Booking.com
European Hotels Launch Class Action Suit Against Booking.com
A collective class action lawsuit has been initiated by over 10,000 European hotels against Booking.com, alleging that the company's "best price" or parity clauses violated EU competition law. The lawsuit, coordinated by the Stichting Hotel Claims Alliance and supported by the Association of Hotels, Restaurants, and Cafes in Europe (HOTREC) and 30 national hotel associations, seeks compensation for the inflated commission fees paid by hotels during the period when these clauses were in use.
The key issue at hand is the parity clauses, which prevented hotels from offering lower prices or better availability on alternative platforms or directly on their own websites. The European Court of Justice (ECJ) ruled on September 19, 2024, that these clauses distorted online market competition, suppressed direct bookings, and resulted in inflated commission costs for hotels over a 20-year period from 2004 to 2024.
Booking.com claimed that these clauses deterred "free-rider" bookings (where customers discover a hotel on Booking.com but book directly with the hotel). However, the ECJ concluded that online platforms like Booking.com can operate economically without imposing such restrictive conditions. Consequently, the parity clauses were banned across the EU, leading to their removal by Booking.com in 2024.
In response to the class action suit, Booking.com has denied the claims and legal arguments based on the ECJ ruling. The company maintains that each accommodation partner on its platform is free to set their own distribution and pricing strategies.
According to HOTREC President Alexandros Vassilikos, European hoteliers have long suffered from unfair conditions and excessive costs. He believes that this class action suit is a significant step towards rectifying the wrongs inflicted upon the hotel industry.
The suit will be brought before an Amsterdam court, with an extended time limit for hotels to join ending on August 29. The European Union Digital Markets Act, which led to Booking.com doing away with the best-price clause in 2024, is seen as a positive development by the hotel industry.
The class action is receiving overwhelming support, according to IHA Managing Director Markus Luthe. He emphasised that the hotel industry has been struggling for a long time and this lawsuit is a crucial step towards achieving fair competition and reasonable costs.
Wesley Rahn edited the news article.
[1] European Court of Justice ruling, September 19, 2024. [2] Booking.com statement, 2024. [3] Hotel Claims Alliance press release, 2024. [4] DPA report, 2024. [5] HOTREC press release, 2024.
The class action lawsuit against Booking.com, initiated by European hotels, is centered around allegations of violation of EU competition law due to parity clauses in the finance and business sector, impacting the European hotel industry and news coverage. The European Union Digital Markets Act, a positive development for the industry, led to the removal of these clauses in 2024, following a ruling from the European Court of Justice.
