IHF to join legal action against Booking.com

RTÉ News​

4 days ago

The Irish Hotels Federation has announced it is joining with hotels from across Europe to support a landmark collective legal action against Booking.com over its restrictions against hotels offering lower rates on their websites or on rival sites.
It follows a judgment last September from the Court of Justice of the European Union indicating that Booking.com's parity clauses, which were contractual terms that prevented hotels from offering lower prices or better availability through other channels, violated EU competition rules.
These parity clauses were inserted into contracts between online booking sites and hotels, and the practice triggered complaints by competitors and scrutiny from regulators across Europe concerned about fewer choices for consumers.
Hotels are now seeking substantial financial compensation for damages resulting from what they claim were inflated commission rates charged by Booking.com.
The collective legal action is being supported by the European hospitality association (HOTREC) as well as more than 25 national hotel associations across Europe.
It is being brought before the Amsterdam District Court in the Netherlands, where Booking.com is headquartered.
The IHF estimates that over 900 Irish hotels and guesthouses are eligible to join this legal action, having been negatively impacted by Booking.com's use of anti-competitive parity clauses that were in effect from 2004 to 2024.
The IHF said these clauses "placed hotels and their customers at a significant competitive disadvantage by suppressing price competition between Booking.com and other online platforms" and that "this resulted in hotels being charged inflated levels of commissions".
The clauses also restricted hotels from offering better prices or availability on their own websites, limiting direct sales and autonomy.
Under EU competition law, affected hotels may be eligible to recover a significant portion of commissions paid to the platform between 2004 to 2024, in addition to interest.
IHF Chief Executive Paul Gallagher described the legal action as "unprecedented".
He added that the parity clauses "have been a major issue for Irish hotels going back 20 years, resulting in significant financial harm due to the inflated levels of commissions charged.
"We see this as an important opportunity to send a strong message to online booking platforms that unfair business practices will not go unchallenged."
In its judgment last year, the Luxembourg-based Court of Justice of the EU said there was no evidence to justify the Booking.com parity clauses.
"It has not been established that price parity clauses, whether wide or narrow, first, are objectively necessary for the implementation of that main operation and, second, are proportionate to the objective pursued by it," judges said.
They said the restrictions may reduce competition between various hotel reservation platforms, force out small platforms and new entrants and do not appear to be necessary to ensure Booking.com's economic viability.
However, the court also said the clauses could not be considered anti-competitive under EU competition laws.
At the time, Booking Holdings (which owns the Bookings.com brand) expressed disappointment with the ruling.
The company said it the parity clauses "were necessary and proportionate to the relationship between accommodation partners and Booking.com and that Booking.com operates in a competitive market".
The IHF is in communication with all affected hotels and guesthouses in Ireland in relation to the next steps for joining the collective legal action.
The case is being led and handled by the same competition lawyers, litigators and competition economists who worked on the case that led to the ECJ's judgment.
In addition to the IHF, the action is supported by national hotel associations from Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, and Switzerland.