What exactly has been decided with this verdict?
Ulli Kastner: "Basically the request of the cartel office and the IHA was denied and the inadmissibility of the rate parity clause in the terms and conditions of booking.com was lifted.
The grounds are astonishing. The judge is worried that the customer who searches for hotels on booking.com will switch to and book on the actual hotel’s website due to better prices. This injustice could not be accepted by a market leader such as booking.com.
Interestingly there are surveys (the judge has them as well) assuming only 5-6% of all users actually choose this method. And considering how many people are searching for a specific hotel name on Google among others and then still end up on booking.com instead of on the hotel website due to unbalanced marketing proportions, then this reasoning can only be considered absurd.
In my opinion, what drives the judge here is incomprehensible. When taking a closer look at the background, then the judge seems to have proactively pushed this matter without previous actions by booking.com. He seems to be so secure in his reasons that he has enabled all future revisions on higher jurisdiction levels.”
Which effects will the verdict have in favor of booking.com?
Ulli Kastner: "First of all booking.com can now force hotels to rate parity with all its market power and without any legal control. If and how booking.com will officially enforce this remains to be seen.
More important in my opinion is the precedent that will unfold also for other industries. Could amazon force any brand (adidas, etc.) now to not sell cheaper than on amazon? I think the judge is completely unaware of the chain reactions that can be deduced from this."
Many hoteliers are unsettled, how should they react?
Ulli Kastner: "I can only suggest that hotels continue to offer cheaper prices on their own website. The principles “there are alternatives” still prevails. Booking.com receives the majority of ist customers via Google and meta search like tripadvisor and trivago. Hotels have to visible there with their own website and this is cheaper and more efficient with a price advantage.
If one gives up on this then this is exactly where one looses the market to booking.com, increases the dependency, indirectly cancels the competition’s dynamic between these players and the monopolizing structures of booking.com will only become greater. One has to counter this spiral.
Markets only work if one has various distribution platforms. Hotels need to have the choice and have to use the possibilities of direct marketing. Whoever has a good product, a good location and a good website will be able to defy booking.com. We can observe this with a lot of our clients. Whoever solely defines themselves via the prices will have a problem
Furthermore I can only suggest to end all – really all – correspondence with booking.com. Even if it has already existed for more than ten years. I think the last word hasn’t been uttered yet in this context. And as one can see with the verdict against HRS it pays to have patience and good association work (IHA). Then maybe the courageous ones will still be rewarded.“