PARITY CLAUSES AND THE EUROPEAN COMPETITION LAW IN TOURISM 521 decrease in the rates for rooms and a shift to closed user group members’ rates (CUG) which fall outside the scope of the narrow parity obligation8. The French Competition Agency noted that: The final commitments made by Booking.com (…) re-introduce competition between OTAs, address the risk of foreclosure of competing OTAs and notably new entry OTAs and enable to respond to competition concerns even though similar undertakings have to date not been taken by other OTAs. Furthermore, contrary to allegations of certain contributors to the market test, the commitment relating to the partial removal of the price parity provision is not tantamount to maintaining wide de facto price parity provision9. Booking’s practice and commitments are an example across Europe; the Swedish competition authority noted that the risk that hotels free-ride on investments made by Booking is reduced by a narrow MFN. How can we say if the introduction of an MFN may or may not influence the price levels or relative prices that would have existed in the but-for world? The potential pro and anticompetitive effects of an MFN are largely based on the degree to which the MFNmay affect pricing and output decisions – decisions which are based on the characteristics of the market. There are two intermediary platforms in the market that are identical in all forms, except that one has significantly more users than the other. In assessing the potential economic effect of an MFN on consumers, it is important to understand the bases of competition among intermediaries and the relationship between the products purchased from upstream suppliers and those sold to consumers (Samuelsen, 2012). MFN clauses must provide that one party a contract will grant conditions to the other that are at least as favourable as those granted to any other party. Rey & Vergé (2016) show that price parity clauses have no impact on marginal commission rates when commissions can be non-linear, for instance, including a fixed component and a constant price per sale. In this case, the only impact of price parity clauses is to lead to uniform prices. Wang & Wright (2016) extend the previous model to allow in platform 8 See, for instance, the French Competition Authority decision, paragraphs 305–309 http://www. autoritedelaconcurrence.fr/pdf/avis/15d06.pdf. 9 European Commission, Antitrust: Commission Opens Formal Investigation into Amazon’s e-book Distribution Arrangements Brussels (European Commission Press Release, 11 June 2015) http://europa.eu/rapid/ press-release_IP-15-5166_en.htm.
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