Class action suit filed against Booking.com in Europe

Hotels across Europe are being encouraged to join a class action against Booking.com to reclaim potentially billions of euros in overpaid commissions.

The action is being launched in the Netherlands, where Booking.com has its head office, and is being co-ordinated through a Dutch foundation called the Stichting Hotel Claim Alliance. It is being pursued by a pan-European team of lawyers and economists with experience in the field of competition damage claims, including Volker Soyez, a partner in Brussels-based legal firm Schneider Geiwitz & Partner (SGP).

The action is being launched following a judgement by the European Court of Justice (ECJ) in September 2024 in the a long-running case between Booking.com and 63 individual German hotels and groups, including 25hours, Dorint and Steigenberger.

The case revolves around the legality of so-called parity clauses in the agreements between the online travel agency (OTA) and hoteliers.

When Booking.com entered the German market in 2006, it included what is known as a “wide parity” clause in its terms and conditions for hoteliers, which prohibited them from offering rates lower than those offered on Booking.com through their own sales channels or other OTAs.

In a 2013 case involving HRS, Germany’s Federal Cartel Office ruled that wide parity clauses were contrary to German and European Union laws on cartels. In 2015, Booking.com replaced the wide parity clause with a “narrow parity” clause, which prohibited hotels from offering lower rates on their own channels. The Federal Cartel Office subsequently ruled this was also against German and EU competition law.

The latest class action is being supported by the European hospitality association Hotrec, which alleged that the ECJ “found that the platform's parity clauses breached EU competition law.”

“European hoteliers have long endured unfair conditions and inflated costs. Now is the time to stand together and seek redress. This collective action sends a strong message: Abusive practices in the digital marketplace will not go unchallenged,” Hotrec president Alexandros Vassilikos said in a release.

In an email to PhocusWire, a Booking.com spokesperson called Hotrec's statements “incorrect and misleading.”

“The ECJ judgement did not conclude that Booking.com's price parity clauses were anti-competitive or that they influenced competition (and this can be clearly seen in paragraph 92 of their ruling). So, this ruling does not open the door to damage claims, and we will continue to show that parity clauses do not have an anti-competitive effect in court if needed," the spokesperson said.

Taking action

SGP’s Soyez said the September 2024 judgement brought the situation into sharper focus.

“When the ECJ rendered its judgment, people across our hotel, across Europe became aware that this is not just a German issue but something that affects all hotels in Europe,” Soyez said.

He added that hoteliers were keen to do something but feared retaliation if they went on their own.

“There are larger hotels chains [that] would have been willing to fund this case on their own, but the smaller hotels do not have funds for that. After having talked to a large number of hotels of different sizes, the decision was [made] to have a funder in place who would cover all the costs and cost risks,” said Soyez.

Soyez said the total sum involved in the action could amount to billions of euros in overpaid commission.

“It depends on the number of hotels that participate, but in the German case, we have approximately 2,000 hotels participating and the claims value is €750 million, without interest,” he said.

Hotels and groups wanting to participate in the action have until July 31 to join the claim. They will need the details of how they are incorporated and the invoices they have received from Booking.com.

And the action is not just limited to hotels in the EU.

“Hotels from the European Economic Area, including Iceland, Norway and Lichtenstein, but also the United Kingdom and Switzerland are welcome to join,” said Soyez.

The company made revenues of $23.7 billion in 2024, an increase of 29.3% from 2023.

In its Q4 2024 financial statement, Booking.com said, “The company is involved in investigations related to whether Booking.com's contractual parity arrangements with accommodation providers are anticompetitive because they require partners to provide Booking.com with rates, conditions and availability at least as favorable as those offered to other [OTAs] or by the partner itself.”

“To resolve certain of the parity-related investigations, the company has from time to time made commitments regarding future business practices or activities, such as agreeing to narrow the scope of its parity clauses. Some of these investigations have resulted in fines and the company could incur additional fines and/or be restricted in certain of its business practices in the future.”

Old news?

Pedro Colaço, CEO of GuestCentric, said this case feels like a “blast from the past.”

“If you go back 20 years, people were complaining that they thought that these behaviors were truly anti-competitive,” he said.

“Hotels have moved on from this,” said Colaço. “They said OK, I need to focus on a healthy distribution mix. I need to make sure that I have good direct strategy, a good tech stack, I need to make sure that my pricing is correct, that I can leverage the new Google tools and so on.”

“This could be millions in damages or just millions in distractions, which looks, in my opinion, more likely,” he said.

The question is how Booking.com will react to the action and whether it will aim to claw back any negotiated damages.

Colaço said, “Booking.com is going to come up with listing fees and promotion fees and all sorts of stuff, and it's going to be even more opaque. The big guys have people that run spreadsheets and know exactly what they're spending. The small guys don't, and they are just going to think that Booking.com is very inexpensive and lean even more into the big OTAs and nothing will have been achieved.”

Soyez said, “Booking is in a difficult situation. It is a market dominant company with 70% market share, so whatever they do is very closely scrutinized by the regulators.”

Soyez does not expect for the action to extend to other OTAs in the market, such as Expedia.

“The situation is different,” he said. “Expedia has a market share of between 10 and 15%, which, from a competition law perspective, makes a decisive difference, and that's why we are not looking into expanding this case to other portals.”

Max Starkov, hospitality technologist and digital strategist, said the dominance of Booking.com in Europe is hoteliers’ own doing.

“These lawsuits are like suing the restaurant where you had a nice meal for charging you high prices,” he said.

“Instead of fixing [their] own direct distribution channel and investing in technology, marketing and talent, hoteliers have been embracing the lazy man’s distribution game—via the OTAs. And now they are complaining that OTA distribution is too expensive? Hoteliers knew the cost of OTA distribution the moment they signed up with the OTAs.”

Starkov believes European hoteliers—60% of which are independent—are averse to technology.

“They do not invest adequately, if at all, in technology, marketing and talent: Less than 10% of them have a CRM [customer relationship management system] and some kind of guest reward program in place, and less than 15% have revenue management systems in place. Websites? Last updated before the pandemic. SEO—how do you spell that? AIO [artificial intelligence optimization]—you are kidding, right?”

He added, “No wonder Booking.com has gained such dominance in Europe.”