European Court critical of restrictions imposed by Booking.com on hotels: “On the edge of what is permissible”

Booking.com allows the hotels it works with to rent out rooms via alternative sales channels, but they are not allowed to do so at a lower price than the one on the Booking website. Initially, this applied to offers that the hotels made on their own channels, as well as to offers on other platforms – competitors of Booking.com. Since 2015, the ban only applies to rentals via the hotels’ own channels.

After a German court ruled that such provisions violated EU competition rules, Booking filed a lawsuit in a court in Amsterdam, where it has its headquarters, seeking a ruling that the practice is indeed valid. It was that court that referred a preliminary question to the European Court of Justice on the matter.

Not necessary

In its judgment, the Court notes that platforms such as Booking.com have had a positive effect on competition, as consumers can now quickly and easily find hotels and compare prices. However, the restrictions that Booking.com imposes on its customers are not necessary for the survival of that business model, it says.

Furthermore, prohibiting hotels from offering lower prices on alternative platforms seems to limit competition and could crowd out small and new players. These problems do not arise from the prohibition on hotels also offering lower prices through their own sales channels, but that does not seem “objectively necessary to ensure the economic viability of the hotel reservation platform”, it says.