Draft competition rules on vertical agreements fail to address unfair restrictions for hoteliers

The European Commission published a draft revised Vertical Block Exemption Regulation (VBER) alongside draft guidelines on 9 July 2021, opening the drafts to comment from stakeholders.

HOTREC’s response will focus on the outstanding issue of narrow price parity clauses imposed by online travel agents (OTAs) such as Booking.com and Expedia, which have become increasingly problematic for hotels over the course of the past decade. Despite national bans on narrow price parity clauses in Austria, Belgium, France and Italy and a recent landmark verdict by the German Supreme Court, the draft VBER would continue allowing OTAs to prevent hotels from offering better prices on their own websites than via the OTA platforms.

HOTREC considers that such narrow price parity clauses are unjustified, anti-competitive and detrimental for consumers – a view echoed by European Consumer organisation BEUC – and ultimately continue entrenching the dependency of hotels on online intermediaries. Conversely, national bans on narrow price parity clauses have led to lower hotel prices without a negative effect on demand. As such, HOTREC urges the European Commission to clearly qualify price parity clauses as hardcore restrictions in the updated VBER which is due to be published by next May 2022.

On a related topic, Members of the European Parliament’s various committees dealing with the Digital Markets Act have clearly identified narrow price parity clauses as a problematic issue:  amendments tabled by MEPs from all the major political groups aim to prevent digital gatekeepers from engaging in such practices.