220 COMPETITION LAW IN TOURISM is the use by online platforms of a type of agreement generally traced to the category of MostFavoured Nation clause (MFN), typically included in B2B (business-to-business) long-term contracts, where the supplier undertakes to guarantee the best price conditions to the intermediary concerned as compared with any other dealer. The competitive assessment of such clauses (also known as parity clauses) is controversial in both traditional and digital markets. At first sight, they appear to offer potential benefits to consumers, at least in terms of price transparency and reduction of transaction costs; however, they also give rise to competition concerns, as they may serve to acquire or strengthen monopoly pricing. Their recurrence in the digital environment has revitalised an ongoing debate on the likely effects of these clauses on competition9. Nevertheless, the Court temporarily banned the activities of Booking.com, in March 2017, following a complaint filed by the Association of Turkish Travel Agencies (Tursab) on the grounds that the website created unfair competition and thus violated Turkey’s competition law. Then, the global travel agent appealed the Court’s decision, but the request was overruled. An expert report prepared by academics from several Turkish universities was submitted this week to the Court responsible for the case. The 30-page report said that Booking.com was not a travel agent, did not work in Turkey as an intermediary and, therefore, did not infringe Turkish competition law. The report also said that Netherlands-based Booking.com BV was a foreign company and did not need a travel agent license to act as a broker in Turkey. This report also concluded that the company should be taxed in Turkey for revenue generated from activities in the country via commissions paid for hotel reservations. Lawyers representing Tursab said at Court that the report included contradictory remarks, while Booking.com’s lawyers requested the removal of the ban. The next hearing is scheduled for April. The Turkish Competition Authority had previously concluded that the “rate parity clause” of Booking.com infringed upon Turkey’s competition law, fining the firm’s Turkish subsidiary 2.5 million lira (approx. 480,000 US$). Rate parity clause is a legal agreement between hotels and online travel agencies in which the hotel guarantees to use the same rate and terms for a specific room type regardless of the distribution channel. 9 Parity Clauses and Competition Law in Digital Marketplaces: The Case of Online Hotel Booking by Prof. Margherita Colangelo (Roma Tre).
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