HRS loses rate parity appeal, calls for unified approach

A German court has ruled parity clauses from hotel specialist HRS are anti-competitive, paving the way for similar decisions on other online intermediaries.

The ruling from the Higher Regional Court Dusseldorf dismisses an appeal from HRS of a decision made by Bundeskartellamt, the German Federal Cartel Office, more than a year ago.

The cartel office decision was based on “most favoured nation” or MFN clauses whereby HRS partners could not offer cheaper rates anywhere other than via the hotel booking giant.

Regulators also concluded that these clauses breached both German and European competition law and since March last year HRS has not been allowed to include the clause in contracts with hotels in Germany.

In a statement to Tnooz, HRS says it will continue to keep the Best Price Guarantee out of terms and conditions for German hotel partners.

The German Hotel Association was also involved in the proceedings and chief executive Markus Luthe says of the appeal rejection:

“With today’s decision by the Higher Regional Court Dusseldorf we are fully confirmed in our legal opinion that MFN clauses imposed by HRS and other hotel booking portals represent a clear and blatant restraint of competition. Competing booking portals have also been hindered unlawfully, as well as the direct distribution of the hotel industry.”

The hotel association believes other European authorities will now take note of the ruling in Germany in potential anti-trust dealings with other hotel intermediaries.

The HRS statement goes on to stay that the ruling puts it at a competitive disadvantage to other intermediaries and it will consider further legal action following the court decision.

The company says other online intermediaries continue to use the clause in contracts but adds that further legal proceedings are going through the Federal Cartel Court.

HRS chief executive Tobias Ragge says the company has been at a disadvantage for almost two years and that it is the Federal Cartel Court is responsible for “promptly creating the same conditions for all market participants.”

 “While there is ongoing work to find an industry-wide solution internationally, this decision leads to a separate path in Germany.”

He points to market tests from cartel offices in France, Sweden and Italy imposing the same conditions on all players is possible.

Less than a month ago Booking.com said it would soften its price parity clause after several European antitrust authorities raised concerns over anti- competitiveness. 

The European Commission is coordinating investigations in a number of countries and third parties have until the end of January to provide feedback.

In September, the UK Competition Appeal Tribunal overturned an Office of Fair Trading (now called Competition and Markets Authority) decision which had closed an investigation of InterContinental Hotels.

The CMA statement can be read here.

NB: Best price image via Shutterstock.

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About the Writer :: Linda Fox

Linda is Managing Editor for tnooz. For the past decade, she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine. In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management, and research companies. Prior to her freelance career, she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.

 

Comments

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  1. Brian

    For anyone sending in comments to the competition authorities, here is some useful information.

    Here is the link for the investigation by the French Authorities: http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=592&id_article=2463

    Here is a postal address. Comments should be submitted before 17:00 on 31 January, 2015. Mention file numbers 13/0045F and 13/0071F.

    Autorité de la concurrence
    Bureau de la procédure
    Dossier 13/0045F et 13/0071F
    11 rue de l’Echelle
    75001 Paris
    ———-
    Here is the link from the Swedish Authorities requesting hotels to submit their comments: http://www.konkurrensverket.se/en/news/the-swedish-competition-authority-invites-hotels-and-other-affected-parties-to-submit-comments/

    Comments must be received by 30 January, 2015
    Comments can be sent by email to this address: registrator@kkv.se

    or by mail to:

    Konkurrensverket
    103 85 Stockholm, Sweden

    Submit your company name, contact information and opinions with the case reference number 596/2013.
    ———-
    Here is the link from the Italian Authorities requesting hotels to submit their comments: http://www.agcm.it/stampa/news/7347-impegni-di-booking-allantitrust-sui-prezzi-offerti-dagli-hotel-partner-.html

    Comments must be received in writing by 31 January, 2015. The assessment procedure will be completed on April 1, 2015.

    Here is the postal address:

    Direzione Generale per la Concorrenza
    Direzione Manifatturiero e Servizi dell’Autorità
    Piazza G. Verdi, 6/A, 00198 Roma

     
  2. Evan Davies

    Lets hope 2015 is the year Europe bans the best rate guarantee clause, hotels have had their hands tied for years now.

     
  3. Dorian

    HRS is concerned that it is being put at a competitive disadvantage?! I know the feeling.

     
  4. Yuriy

    Well, excluding best rate guarantee from the standard contract is definitely a good sign. But the question is will the OTAs remove it form their “extra” services, like Priority Placement on booking.com and some similars from big players, as well?

     
 
 

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