The case of the "lowest price" clause on the Booking reservation platform needs to be discussed and to illustrate the complexity in some cases of finding a balance between the rights, obligations and interests of each of the parties - the platform, hotels and consumers, while complying with the current legislation.
The comment is by the creator of the online platform "We the consumers" Gabriela Rumenova on the occasion of filing a collective action against Booking for compensation for losses caused by the operation of the so-called price parity clauses in the period 2006 - 2024.
Violation of competition law also affects the rights of consumers, because it leads to a narrowing of their choice.
„Let's say that such a platform allows customers to orient themselves through the reviews left there about the quality of the service. If this platform, by virtue of such a clause between it and the service provider, offered lower prices than all possible places where these exact rooms can be found, and the next moment the accommodation facility starts offering this service at lower prices through its channels or through other platforms, it may turn out that users no longer book through this platform and all the reviews left were valid for the past period. If the conditions have already changed, users may be misled about the current state of the service and the ratings may not be a good guide for them.“, she gave an example.
On the other hand, if hotels offer better prices, the platform may not receive fair remuneration for the services it provides. At the same time, countries such as Italy, France, Austria, Belgium have banned price parity clauses by law and yet the platform in question has survived in these markets. That is, such a clause is not necessary for the existence of the platform as an economic entity, as noted in the decision of the Court of Justice of the European Union on the case.
On the other hand, the “best price“ clause can give Booking such an advantage that it can displace smaller platforms or prevent the entry of new ones.
That is why the case is very interesting – the balance is sought so that consumers have more choice and the principle of fair competition is preserved.
The dispute over the “best price“ clause has a long history. It began in 2006, when Booking entered the German market. The Federal Office for the Protection of Competition in Germany issued two consecutive decisions – in 2013 and in 2015, that the clause contradicts the prohibition of cartels in European Union and German law and ordered its use to cease. The Higher Regional Court in Düsseldorf accepted that the clause undoubtedly restricted competition, but could not be considered contrary to the prohibition of cartels. The final end to the dispute, not only for Germany, but also for the entire EU, will be the entry into force in 2024 of the Digital Markets Act, which prohibits price parity clauses.
All this leads to the filing of a collective action, through which the accommodation facilities affected by the operation of this clause can recover up to 30% of the amounts for commissions to the platform and interest on them. Behind the initiative are the Association of Hotels, Restaurants and Cafés in Europe, as well as the 30 industry organizations in different countries that have supported it so far. Every owner of a tourist property with an agreement with Booking with such a clause in the period 2006 - 2024. can join the class action until August 29th – free of charge, through a specially created platform.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bg