Hotels considering filing for damages against booking.com, HRS and Expedia after ban of “best price clauses”

In a recent decision, the German competition authority (FCO) prohibited the use of "best price clauses" applied by the hotel platform booking.com. The decision was rendered after the Regional Court of Dusseldorf confirmed an earlier FCO decision against HRS, a similar hotel booking website. The FCO is currently investigating Expedia, the third player in the triumvirate currently dominating the German hotel booking market.

Under the "best price clause" used by both booking.com and HRS, hotels were obligated to always offer their rooms via booking platforms at the lowest available rate which prohibited hotels from offering better offers on the hotel's own website. According to the FCO, such clauses restrict competition. For example, they prevent hotels from offering new innovative offerings like a "deal of the day" or other campaigns.

Following the decisions prohibiting "best price clauses", several hotels are now assessing whether to claim damages from the hotel booking platforms. Some hotels in Germany are even already preparing actions for damages.

Actions for damages for violations of competition law are facilitated under German competition law, which provides that the final and legally binding decision of a competition authority has binding effect on German courts in relevant civil proceedings. Therefore, claimants need to demonstrate only that they suffered harm from the violation of competition law. German law even provides that courts may estimate the amount of damages - which must be paid plus interest.

In order to assess whether hotels suffered financial harm, potential claimants must compare scenarios with and without the "best price clause". If hotels would have been able to sell more rooms via other channels (including their own website) without the "best price clause", it can safely be assumed that the hotels would have to pay lower total amounts of commission fees to the platforms without the "best price clauses". Moreover, such clauses have been used for many years, making it likely that hotels have lost significant amounts of money over time. Any such potential harm needs to be assessed against the potential legal costs associated with litigation. Depending on the amount of potential damages, it might be sensible to consider teaming up with other potential claimants.

For further information on this topic please contact Dr Michael Bauer at +32 2 6500 421, [email protected] or Kirsten Baubkus at +32 2 6500 429, [email protected] Michael successfully represented one of the main complainants against the HRS “best price clause”.