Booking.com This July 1, it begins updating its contracts with partners in the south of Gran Canaria as well as in the rest of the European Economic Area, eliminating parity clauses. This measure will allow partners to offer different rates in Booking.com and its direct channels. It is a response to the Digital Markets Act (DMA).
The elimination of parity clauses means that partners of Booking.com They are no longer obliged to offer the same rates on the platform as on their own sales channels. Booking.com recognizes that parity has provided significant benefits, offering consistent pricing and a simplified search and booking experience for consumers.
However, the company is committed to complying with the WFD and will continue to invest in products and services that add value to its customers, facilitating their travels and experiences around the world. Besides, Booking.com has begun to implement some of the obligations of the Draft Decision of the National Markets and Competition Commission (CNMC) in Spain. These actions reflect the company's commitment to good faith and transparency while awaiting the CNMC's Final Decision. Booking.com will evaluate its options once the final decision is issued.
In 2021, the Supreme Court of Düsseldorf (Kartellsenat des Oberlandesgerichtses Düsseldorf) endorsed that German Competition Law allows Booking.com apply “narrow” most-favored-nation (MFN) clauses. Therefore, it was concluded that Booking.com had the right to prohibit the hotels with which it collaborates from offering prices lower than those offered by it.
MFN clauses or parity clauses are contractual terms by which companies undertake to equate the conditions of purchase or sale of their products or services with those offered by their competitors, and a distinction can be made between two types of MFN clauses, the “wide” and “narrow”. “Narrow” MFNs prohibit the hotel from offering better terms through channels where the supplier controls the prices (an example would be the hotel agreeing not to offer a lower price on its own website).
“Broad” MFN prohibits the hotel from offering a lower price than the contracting party to any party and through any channel (for example, forcing a hotel to offer the lowest price in Booking.com, both on its own website and on those of other metasearch engines). The Judgment upheld the appeal presented by the company to the Decision of the German Competition Authority (Bundeskartellamt) of December 23, 2015, in which it prohibited Booking.com use MFN clauses, both broad and narrow.
The German court argued that narrow MFNs are necessary to avoid opportunism (“free-riding”) on the part of customers and hotels. Without this clause, clients could use Booking.com to identify the hotel that best suits your needs (and the hotels to advertise) and then make or offer the reservation on its website, leaving the company without the 10-15% intermediary commission. However, it maintains the prohibition of broad clauses to allow the creation and growth of other metasearch engines, thus favoring competition in the sector.
