The effects of narrow price parity clauses on online sales of online hotel platforms – Investigation results from the Bundeskartellamt’s Booking proceeding

The Bundeskartellamt has published a paper on “The effects of narrow price parity clauses on online sales - Investigation results from the Bundeskartellamt’s Booking proceeding” as part of its series of papers on “Competition and Consumer Protection in the Digital Economy”.

Andreas Mundt, President of the Bundeskartellamt: “Price parity clauses are a frequently encountered restriction of online sales. In its proceeding against Booking.com the Bundeskartellamt looked at the extent to which such clauses limit competition, both between the online hotel platforms and the hotels themselves. The paper examines, among other aspects, the effects of price parity clauses and presents the findings on hotels’ price-setting behaviour and on consumers’ behaviour when booking a hotel room.”

The findings give invaluable insight into the quantitative significance of potential “free-riding effects”, which are often used as a justification for such clauses.

The Federal Court of Justice has allowed the Bundeskartellamt’s appeal on points of law against the first instance decision by the Düsseldorf Higher Regional Court to reverse the authority’s prohibition decision against Booking. The court proceeding is still ongoing and the question whether Booking.com infringed competition law remains open. The following publication is exclusively based on the Bundeskartellamt’s perspective on the investigation results and the conclusions and assessments it has drawn from them.

The new publication is available here.