PARITY CLAUSES AND THE EUROPEAN COMPETITION LAW IN TOURISM 519 One form of restriction, often called most-favoured-nation clauses, has frequently been subject to antitrust scrutiny. 3. THE MOST-FAVOURED-NATION CLAUSES (MFNS) Other benefits and efficiencies associated with MFNs include their role in preventing delays in transacting – removing uncertainty as to the availability of better alternative bargains – and in reducing transaction costs by avoiding the need for a constant negotiation of terms between the contracting parties (Fletcher, 2014). In the main analysis, the MFNs are divided into two narrow and wide, differentiated by their scope and effects (Ezrachi, 2015). On the one hand, a narrow MFN links the price and terms quoted on an online platform to those available directly on the upstream supplier’s website, ensuring that the former will not be less attractive than the latter. On the other, a wide MFN provides for similar protection on a wider scale, aiming to ensure that the price and terms quoted through the platform in question will not be higher than the price available directly on the upstream supplier’s website or any other platform. Operating behind the scenes of online commerce, parity clauses, also known as most-favoured-nation clauses, have played an increasingly significant role in the relationship between price comparison websites (PCWs) and their suppliers. These clauses aim to provide assurance to the downstream online platform that it has received goods or services from the supplier at terms that are at least as favourable as those offered to any other buyers. The rationale behind such restriction lies in the vertical relationship between the PCW and the supplier. It is designed to resolve the hold-up problem, often manifested in vertical relationships, by removing the risk of the supplier or other sellers, free- -riding on the PCWs’ investment in promoting the supplier’s products and services. The online world has seen the increased introduction of various traditional vertical restraints, such as MFNs, Resale price maintenance, Online sales restrictions, Geoblocking and Restrictions on advertising online. While parity clauses are aimed at minimising externalities and increasing investment and innovation downstream, wide parity clauses may theoretically have the potential to limit such investments. Some of the most prominent investigations into MFNs and similar restrictions have occurred in industries
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