PARITY CLAUSES AND THE EUROPEAN COMPETITION LAW IN TOURISM 527 law. The OTAs responded with attempts to limit parity to only between OTAs and a hotel’s direct channel, or “narrow parity”. The courts struck down these contractual restrictions as well24. The two dominant online travel agency global – Expedia (which operates the Expedia, Wotif, Hotels.com and Trivago brands) and the Priceline Group (which operates Booking’s brand) – that control almost 85% of online accommodation bookings in Australia have a pricing-parity requirement in their contracts with Australian hotels, motels, apartments and other accommodation businesses that are a restriction on trade25. Recent developments in Australia point out to a likely ban on rate parity clauses. As one legislator told the media about the OTA duopoly, “They’re gauging local hotel owners”. While there has not been any action at the time of writing, Expedia has already announced that it will no longer enforce any parity restrictions. Germany, France, Italy and Austria completely ban the MFNs (wide clause) online Tourism of OTAs. Germany joined France in limiting wide-ranging rate parity clauses, but, in early 2016, the country also prohibited “narrow parity” or contractual restrictions that required hotels to price rooms at the same rates on both direct channels and OTA. It is the total control over channel pricing strategy. Rules are only effective if they can be applied to either prevent harmful conduct or to affect the way the market operates to ensure fair competition and consumer choice. After the ban of price parity clauses, in Belgium, on 19 July 2018, the Swedish Patent and Market Court issued its judgement forbidding Booking to impose parity clauses in its contracts with hotels from 20 October 2018 onwards. Such clauses must not be imposed in any form and under any circumstances on hoteliers, also ranking algorithms must not consider refusal of hoteliers who are denying such clauses. As Michael Grenfell said, “You can get some good bargains on the sites, but it is very important that you can trust what they say”26. Incentives by Booking, e.g. in the form of lower commissions to apply such clauses, are forbidden as well. Sweden is already the sixth country in the EU where parity clauses of at least of the European market leader Booking are banned. 24 Source: https://www.otainsight.com/resources/blog/the-decline-of-rate-parity-clauses-and-what-this-means- -for-hotels. 25 Source: https://www.vtic.com.au/labor-to-ban-price-parity-clauses-between-online-travel-agencies-and- -accommodation-providers/. 26 Ibidem, 16.
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