The EU’s highest court has found that restrictions imposed by hotel-reservations site Booking.com on hotels could affect competition in the market.

The Court of Justice of the European Union (CJEU) was giving its judgment on questions referred to it by a Dutch court after proceedings taken by Booking.com.

The website had challenged a finding by the German courts that ‘price-parity' clauses used by hotel-booking platforms were contrary to EU competition law.

Hotel prices

Hotels pay a commission to Booking.com for any reservation made by travellers through the platform.

The clauses at issue prevent hotels from offering overnight stays at prices lower than those offered on Booking.com.

Initially, that prohibition applied both to the offer on hoteliers’ own sales channels and to the offer on sales channels operated by third parties (a clause known as a ‘wide-parity’ clause).

Since 2015, however, a limited version of that clause prohibits only the offer of overnight stays at a lower price through hoteliers’ own sales channels.

Small platforms

In its judgment, the CJEU found that such clauses were liable to reduce competition between the various hotel-reservation platforms, and carried the risk of ousting small platforms and new entrants.

The court acknowledged the positive impact of sites such as Booking.com on consumers’ experience of booking hotels.

It added, however, that it had not been established that price-parity clauses were necessary for Booking.com’s main business, nor that they were proportionate.