More than 10,000 hotels sue Booking.com: European lawsuit alleging unfair terms

BarcelonaWhen vacation planning begins, the process of finding a hotel or apartment now goes through Booking, without depending on third parties like travel agencies. This change has had many impacts on the day-to-day operations of these establishments. With Booking, they have gained visibility and transparency—reviews play a significant role in choosing one place over another—but they have also had to adapt to clauses they consider abusive. The price offered by Booking is usually the lowest because, as industry leaders criticize, the platform doesn't allow them to market their rooms cheaper on other digital platforms, not even on its website. This is without forgetting that hotels must pay a fee for each reservation, an average of 15% in Europe, although it can reach more than 20%.

Faced with this new business reality, hoteliers across Europe are preparing a massive class-action lawsuit against the platform. More than 10,000 accommodations in 30 countries have already joined the legal battle, led by the European association Hotrec. Booking accounts for 71% of online travel agency business in Europe, a proportion that continues to grow and has grown by 10% in the last decade, to the detriment of other competitors such as Expedia, which only has a 15% market share.

"This concentration makes hotels heavily dependent on Booking for visibility and bookings, especially smaller and independent properties, and this dependence has allowed Booking to impose unfair contractual terms, such as high commissions and restrictive clauses. This harms consumer choice," the association criticizes.

The European class-action lawsuit comes after various competition authorities, including the Spanish one, declared unfair the conditions that force Booking.com to offer the same or lower price, known as parity clauses. Furthermore, in September of last year, the Court of Justice of the European Union (CJEU) ruled that these clauses restrict competition, a ruling that responded to a complaint by 2,000 German hoteliers that began in 2012 and is now spreading throughout Europe.

The plan is to file the class-action lawsuit in the coming months in the Amsterdam court, the city where Booking.com was founded in the late 1990s. Hotrec believes that if the court rules again, the hotels will be entitled to compensation that covers the excessive commissions paid plus interest. "For two decades, inflated and anti-competitive commissions have caused European hotels millions in losses," Hotrec emphasizes. The association estimates that the total damages could amount to hundreds of millions of euros. For Booking.com, the CJEU ruling "does not conclude that Booking.com's parity clauses are anti-competitive or that they affect competition." "We will argue in court that the parity clauses do not have an anti-competitive effect," the platform warns. They are already prohibited in countries like Austria and France.

A 90% market share in Spain

In Spain, Booking.com arrived more than 20 years ago and represents some 200,000 establishments. According to the Spanish Confederation of Hotels and Tourist Accommodation (Cehat), more than 80% of the country's establishments market their rooms on Booking. Some invoice 60% through the platform. According to the National Commission on Markets and Competition (CNMC), the platform's market share has fluctuated between 70 and 90% in recent years.

Spanish hoteliers will not join the massive class action lawsuit filed by their European counterparts, but will instead pursue it through the courts here. "They're faster than the Europeans," argues Cehat's secretary general, Ramon Estalella, who recalls the years German hoteliers have spent waiting for a ruling, and now they're still waiting to be compensated.

The Madrid-based firm CCS Abogados, led by Jaime Concheiro, will lead the Spanish lawsuit to recover part of the commissions unfairly paid to Booking.com since 2004. So far, more than 600 Spanish hotel companies, including large chains, have joined the lawsuit. Catalan companies represent nearly 30%. The plan is to file the claim next year, with the aim of reaching around 2,000 plaintiffs. Hoteliers can join the lawsuit or sell their rights to claim, an option being chosen by those who fear retaliation from Booking. In both cases, if they win, they will receive 70% of the compensation obtained, with the remaining 30% earmarked to cover the costs of the lawsuit.

The CNMC also issued a fine. with more than 413 million euros Booking.com sued last year for using clauses such as price parity, but also for other unfair commercial terms, such as the platform's ability to unilaterally lower prices or favor hotels with more rooms. The company filed an administrative appeal against the ruling with the National Court, and the court provisionally approved the suspension of the fine, pending a final resolution of the matter.