On 29 July, Spain’s National Commission on Markets and Competition (“CNMC”) imposed the largest fine in its history, €413.24M, for the continuous commission by Booking of two infringements of Article 2 of the Spanish Defence of Competition Act (“LDC”) and Article 102 of the Treaty on the Functioning of the European Union (“TFEU”).
During 2021, the CNMC received two complaints against the Booking platform from two associations in the hotel sector, citing a series of allegedly anti-competitive practices that constituted an infringement of both the LDC and the TFEU. In order for it to be found that the reported infringements have occurred, the alleged infringing party must be in a dominant position in the marketplace and they must have engaged in some kind of anti-competitive behaviour. Following an analysis of the market, the CNMC ruled that it had been proved not only that Booking enjoyed a dominant position in the marketplace offering online travel agency services for Hotels in Spain, but also that it had engaged in a series of anti-competitive practices that had resulted in two infringements due to the abuse of its dominant position.
The first of these infringements is classified as an exploitative abuse of a dominant position. It refers to the imposition by Booking of a series of unfair commercial conditions on Hotels in Spain that wish to make use of the platform. These abusive conditions can be summarised as follows:
- Asymmetry in applying the clause on parity of pricing: While Hotels were not allowed to reduce their prices on their own sales channels (such as their websites) in relation to the price offered by Booking, the platform reserved the right to reduce the hotel’s price unilaterally on their own platform.
- Imposition of abusive clauses in the General Contractual Terms and Conditions (T&C):
- The binding version of the T&C was the version drawn up in English, while the Spanish version was simply a translation, offered as a mere courtesy without any legal value whatsoever.
- The T&C are governed by Netherlands law.
- In the event of any conflict, a Hotel located in Spain must apply to the courts in Amsterdam.
- Lack of transparency in the information relating to subscription to various programmes: The platform offered hotels the possibility of signing up to certain premium programmes in order to achieve greater visibility on the platform. However, Booking did not offer any precise details regarding the actual repercussion that these programmes would have, even though it had the necessary means to do so.
The second of the infringements is classified as an exclusionary abuse of a dominant position. This refers to Booking’s restriction of competition with other online travel agencies. The different criteria and conditions applied by Booking incentivised hotels to follow a pricing and room availability policy that was based on offering the cheapest prices via Booking, to the detriment of other competitor online travel agencies, thus restricting competition.
The CNMC found Booking guilty of both infringements, imposing a fine of €206.62M for each infringement, resulting in a total fine of €413.24M. In addition to this substantial fine, the CNMC imposed a series of obligations on Booking with regard to its behaviour, aimed at ensuring that the practices that had resulted in these infringements did not continue in the future.
