On June 11, 2019, Nustay, a Danish online booking agency, filed a complaint with the Commission against Expedia and Booking.com, alleging a breach of Articles 101 and 102 TFEU. The complaint centers on parity clauses in online hotel booking. In 2015, both Expedia and Booking.com agreed with the Danish Competition Authority to remove wide price-parity clauses from their contracts with hotels. Nustay alleges that these two companies have de facto re-introduced these clauses through certain commercial practices.
Booking platform parity clauses have been a recent focus of national competition authorities, leading to partially diverging decisions across Europe. Nustay’s complaint may therefore offer an opportunity for the Commission to harmonize antitrust enforcement with respect to these clauses.
Theories of harm
Nustay alleges that Expedia and Booking.com are imposing commercial penalties on hotels that show cheaper offers on Nustay than on their platforms. The penalties include downgrading a hotel’s ranking on Expedia’s and Booking. com’s websites and moving the hotel’s offer to other, allegedly less attractive, inventory plans. One example of an inventory plan is Booking. basic, which does not allow customers to make any special requests, alter bookings, request invoices, or receive money back in case of cancellation. This strategy—which Nustay describes as amounting to the enforcement of a wide price-parity clause—would allegedly prevent customers from benefitting from lower prices, especially in view of Expedia’s and Booking.com’s strong position in this space. Industry reports suggest their combined share of a European-wide market for online hotel bookings has been estimated to be around 80% and is likely in the same order of magnitude in Denmark.
Online hotel booking has been a focus for national competition authorities
Nustay’s complaint comes against a background of considerable scrutiny of online booking platforms’ conduct at Member State level in recent years:
- In December 2013, the German Competition Authority prohibited wide price-parity clauses in proceedings against HRS, a German online hotel booking platform. These clauses expressly prohibited hotel operators from offering rival platforms a cheaper rate. The German Competition Authority’s decision was upheld by the Düsseldorf Higher Regional Court in January
- In 2015, Booking.com agreed with competition regulators in France, Italy, and Sweden to remove wide price-parity clauses, but maintained narrow price-parity clauses that prohibited hotels from offering a cheaper price on their own website compared to the price they offered on com.
- In the same year, the German Competition Authority prohibited Booking.com from using narrow price-parity clauses. In June 2019, however, the Düsseldorf Higher Regional Court ruled that narrow price-parity clauses are compatible with competition It found that these clauses can prevent free riding from hotels where customers find the hotel on the online booking platform but later book the room at the lower price on the hotel’s own website; thereby benefitting from the platform’s service while avoiding the platform’s fees. The German Competition Authority has appealed this judgment.
- In July 2018, following an action brought by a Swedish organization representing hotels in Sweden, the Swedish Patent and Market Court Litigation adopted a ruling requiring Booking. com to remove narrow price-parity clauses from its contracts with hotels. This ruling, however, was overturned in May
Additionally, some Member States, such as Italy, France, and Austria, have passed legislation prohibiting the use of wide price-parity clauses. But so far, neither wide nor narrow price-parity clauses have been assessed at the EU-level with respect to online bookings.
The Commission may take the view that existing Member State action, including in Denmark, has addressed this issue, militating against apportioning resources to it. Conversely, the complaint may offer the Commission an opportunity to potentially confirm and consolidate Member State practice in respect of wide price-parity clauses and clarify the approach to narrow price-parity clauses.
From a procedural standpoint, Nustay is seeking to push the Commission to decide in short order on which of the above paths to follow. By making a formal complaint—as opposed to an informal submission, and by announcing this submission publicly—as opposed to keeping such information confidential, Nustay has taken the most aggressive approach to focalizing the Commission’s
attention on the issue. As covered in March’s EU Competition Law Newsletter, Spotify adopted the same strategy in its recent complaint against Apple, which received significant press coverage, further fueled by a highly-publicized rebuttal from Apple. This approach may have contributed to the rumored opening of a formal Commission investigation.
 Wide price-parity clauses expressly prohibit hotel operators from offering rival platforms a cheaper rate, whereas narrow price-parity clauses prohibit hotels from offering a cheaper price on their own website.
 See, for instance, the following industry reports, available at: https://medium.com/traveltechmedia/the-state-of-online-travel-agencies-2019-8b188e8661ac; https://www.statista.com/statistics/870046/online-travel-agency-ota-market-share-in-europe/; https://www.hotrec.eu/wp-content/customer-area/storage/2a 67daccb0e9486218e1a53b48494ab8/European-hotel-distribution-study-final-results-revsl18.pdf.
 Requirements for a Form C complaint are set out in the Commission Regulation (EC) No. 773/2004 of April 7, 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123, 27.04.2004.
 See, e.g., Financial Times, Brussels poised to probe Apple over Spotify’s fees complaint, May 5, 2019, available at: https://www.ft.com/content/1cc16026-6da7- 11e9-80c7-60ee53e6681d.