brussels, Belgium – A wave of potential class-action lawsuits looms over Booking.com following a European Court of justice (ECJ) ruling that clarifies the legality of its “best price” clauses, opening the door for hotels to seek damages. While the ECJ didn’t definitively deem the clauses anti-competitive,it confirmed they fall under EU competition law and require individual assessment,a decision hoteliers are framing as a notable victory.
The dispute centers on parity clauses, previously common in Booking.com’s contracts with hotels. These clauses required hotels to offer Booking.com’s rates equal to or better than any other platform or direct booking channel. The ECJ ruling, delivered in September 2023, effectively allows national courts to evaluate whether these clauses restricted competition.
Booking.com maintains its commitment to “fair competition,” arguing that past parity clauses actually “fostered competitive pricing.” The company points to a poll indicating that 74% of hoteliers believe Booking.com increases their profitability, citing improved occupancy and reduced customer acquisition costs. The poll’s methodology and specific sample size are not detailed in the provided source.
However, industry representatives strongly disagree. Véronique Siegel, president of the hotels division of Umih, the French hospitality sector association, described Booking.com’s practices as “extractive.” She illustrated the financial impact, stating that a hotel might receive only €75 (approximately £65) from a €100 customer payment after Booking.com’s commission, leaving a shrinking margin to cover operational costs like salaries and investment.
the reliance on Booking.com is widespread, particularly among smaller, independent hotels lacking the resources for extensive online marketing. This dependence has allowed Booking.com to steadily increase commission rates, putting pressure on hotel margins. Current standard commission rates typically range from 10% to 25%, depending on the hotel and services utilized.
Data from a recent study by Hotrec, the European hospitality association, and the University of Applied Sciences and Arts Western switzerland reveals Booking Holding’s dominant market position. In 2024, the company controlled 71% of the European online accommodation booking market, up from 68.4% in 2019. This consolidation underscores the “winner takes all” dynamic described by Rupprecht Podszun,director of the institute for competition law at Düsseldorf’s Heinrich Heine University.
Booking.com’s market capitalization currently stands at approximately $170 billion (£127 billion), exceeding the value of automotive giant Volkswagen. The company, headquartered in Amsterdam, Netherlands, operates in over 196 countries and lists more than 2.9 million properties.
Legal experts anticipate a lengthy and complex legal battle.A key challenge will be quantifying the damages suffered by hotels as a result of the parity clauses. “Judges will have to form an opinion and then it will go through all the appeals – everything at great expense and with all the tricks available under the law,” Podszun told Germany’s Süddeutsche Zeitung. The potential for collective redress mechanisms, such as class-action lawsuits, is being actively explored by hotel associations across Europe, including in Germany, France, and Italy.
The case represents a significant challenge to Booking.com’s business model and a potential turning point in the relationship between online travel agencies and hotels. Hoteliers view the legal action as a stand against perceived exploitative practices and a demand for fairer terms of service.
