Best price dispute: Hoteliers partially succeed against Booking.com

The long-standing legal dispute over the business practices of the world's leading booking platform Booking.com has taken another turn. The Civil Chamber 61 of the Regional Court Berlin II ruled on Tuesday that the Amsterdam-based parent company and its German subsidiary are fundamentally liable for damages to accommodation providers. A total of 1099 plaintiffs, who had defended themselves against the portal's so-called best price clauses, will benefit from the judgment (Ref.: 61 O 60/24 Kart).

The background to the proceedings is the portal's strategy, practiced for years, of imposing strict rules on hotels and guesthouses regarding their own pricing. Until the summer of 2015, the company used "wide" best price clauses. These required accommodations to always offer the absolute lowest price on Booking.com – regardless of the sales channel chosen. From July 2015 onwards, "narrow" conditions followed, which at least prohibited hoteliers from offering lower prices on their own website than on the booking portal. The German Federal Cartel Office had already prohibited this practice as anti-competitive at the end of 2015, a decision that was upheld by the Federal Court of Justice (BGH) in mid-2021 in the final instance.

According to a press release, the Berlin Regional Court has now followed this legal opinion. It found that both types of clauses severely restricted competition. The judges emphasize that the price fixing deprived hoteliers of the freedom to pass on their operating cost savings to customers through direct sales. Since direct sales do not incur intermediary commissions of an average of 10 to 15 percent, providers could have used this leeway for more favorable offers. This was effectively prohibited by Booking.com's business practices. The conditions also significantly complicated the flexible marketing of last-minute capacity.

Around 190 lawsuits dismissed

The chamber's decision on the admissibility of the declaratory action is legally interesting. Actually, plaintiffs must precisely quantify their claims if possible. However, since the hoteliers argued that years of market manipulation by Booking.com had led to increased concentration and the formation of an oligopoly, and that these effects were still ongoing, the judges considered the lawsuit admissible. A concluded factual situation had not yet occurred regarding market development, so precise damage calculation could not be demanded at this time.

Nevertheless, the plaintiffs were not successful in all points. The court dismissed the claim for the repayment of booking commissions already paid. In this regard, the judges considered the lawsuit inadmissible, as these were completed transactions that the hoteliers should have quantified and sued for directly. In 70 cases, the lawsuit failed because a proper power of attorney was missing. In 118 plaintiffs, the chamber could not ascertain that they were affected by the cartel violation. In one case, the lawsuit was inadmissible for other reasons.

The judge's ruling does not yet mean that money will flow immediately. The current proceedings were solely about the fundamental determination of liability. The specific amount of damages and whether the clauses were actually causal for financial losses in individual cases must be clarified in future proceedings.

Appeal is possible – mixed reactions

The judgment is also not yet legally binding. It is to be expected that the legal dispute will proceed to the next instance. Booking.com now has one month to file an appeal with the Berlin Court of Appeal. Given the high dispute values and the fundamental importance for the entire travel industry, filing appeals is considered likely.

In its initial reaction, Booking.com emphasized that the ruling had not yet made "any findings" regarding potential damages from the previous clauses. This could only be done in complex, technical proceedings after expert analysis. The German Hotel Association (IHA), on the other hand, spoke of a landmark decision by the regional court. This also gives additional momentum to a parallel class action filed by more than 15,000 European hotels with the Amsterdam District Court a few months ago.

(kbe)