Another victory to Booking.com in dispute over MFN clauses

Oberlandesgericht Düsseldorf case no. VI Kart 2/16

By assistant attorney Simon Christensen

Great focus on MFN clauses

The judgment is the second within the last month, in which Booking.com has succeeded in the claim that its so-called “narrow” MFN clauses are not contrary to the competition rules. At the beginning of May, the Appeal Division of the Swedish Patent and Market Court also found in favour of Booking.com in a similar case. 

Read our news article on the Swedish decision.

The German action was brought following the German competition authorities’ finding in 2015 that Booking.com’s price arrangements in Germany were illegal. The German authorities therefore prohibited all types of MFN clauses, thus giving a broader scope of application to the competition rules than the authorities in many other Member States. In their assessment of similar clauses, many European competition authorities have accepted the use of “narrow” MFN clauses, prohibiting hotels from offering prices on their own websites that are lower than those offered on the booking platforms.

The German court followed this pragmatic approach and concluded that the use of narrow MFN clauses is not incompatible with the competition rules. In the absence of such clauses, hotels may offer prices on their own websites that are lower than the prices on the booking platforms. If booking platforms are denied access to use narrow clauses, they will - according to the German court - not be able to ensure a fair and balanced exchange of services. It would allow hotels to “free-ride” on the booking platforms’ search engine and the associated exposure, while reaping all the benefits themselves by offering lower prices than the platforms.

Read the press release of the German court (in German).

The last word?

The Oberlandesgericht Düsseldorf may not have the last word in the matter, however. Thus, the German hotel association, Hotelverband Deutschland, has indicated that the authorities should appeal the decision to Bundesgerichtshof, the German supreme court.

The German authorities have not yet decided whether to appeal or not.

An officer of the EU Commission said at a recent conference that the Commission has to look at the different approaches to MFN clauses in Europe in connection with its revision of the Block Exemption Regulation on vertical restraints, which will expire in May 2022. The officer also said that the Commission is aware of the debate on the lawfulness of MFN clauses, and that it will be taken into account in the preparation of a harmonised Block Exemption Regulation.