In the case of Booking - Tourism & Law, we advise: this is not yet the time to seek compensation.

The CNMC's historic sanction of Booking, which was achieved with the legal advice of Tourism & Law, marks a milestone in the defense of competition in Spain.

Madrid on August 6, 2024.

After the historic sanction of 413.2 million euros that the National Commission on Markets and Competition (CNMC) has imposed on Booking for abuse of a dominant position, a new legal framework has opened up in the market for large online brokerage in hotel distribution, according to Tourism & Law, a law firm that provided legal advice in the process to the Madrid Hotel Business Association (AEHM).

The CNMC resolution is based on two continuing violations: exploitative and exclusive domain abuse. It concludes that Booking, taking advantage of its leading position in the online tourist accommodation brokerage sector, imposed restrictive competition clauses on hotels, such as tight rate parity, the obligation to accept conditions in English and the submission of disputes to the courts of Amsterdam. In addition, it also sanctions the lack of transparency in the preferential, preferential plus and genius programs, which exclusively benefited Booking.

Consequences for the hotel sector

The resolution has already brought about significant changes for hotels in their relationships with Booking. As of July 1, 2024, Booking eliminated the narrow parity clause in Europe, has recognized the mandatory nature of clauses in Spanish and has allowed the resolution of disputes in Spanish courts. These modifications, although justified in the need to comply with the Digital Markets Act, can only be seen as an obvious attempt to mitigate the impact of the sanction.

“In accordance with the Competition Law, hotels that have suffered abusive Booking practices would have the possibility of seeking compensation for damages, provided that they are real, demonstrable and quantifiable, and are duly individualized. This represents an opportunity for hotel establishments to be compensated for the damage suffered. However, if Booking finally appeals for the National High Court to review the resolution, that claim would have to wait until there is a definitive judicial ruling,” says Hortensio Santos, a Tourism & Law lawyer who has led this case.

Outreach for other associations and platforms

Although the administrative procedure as such is closed, other associations may appear as interested parties later on in the event that Booking appeals, as announced, to the National High Court. Tourism & Law warns that “this is not yet the time to start applying for claims”, since we must not lose sight of the fact that this resolution can be reviewed by the National High Court, although at the same time they recognize that they are already working with many of their clients offering their advice for future claims.

Because, as responsible for legal advice to AEHM throughout this process, Tourism & Law has the necessary expertise to support other actors in the sector once the time comes to take action. “Be that as it may, the CNMC resolution sends a clear message to other accommodation management platforms (such as Airbnb): that they must adjust their behavior to Spanish and European competition regulations, avoiding any practice that could be considered abusive or unfair. However, our objective has already been met, which is to modify the conditions that Booking applies to hotel establishments in Spain,” adds Mª Paz Abad, director of Tourism & Law.

A milestone in the defense of competition

The role of Tourism & Law has been key in this legal process, diagnosing the situation of the affected hotels and offering the necessary legal advice. His work included collecting testimonies and documentary evidence, as well as providing continuous assistance to the Madrid Hotel Business Association (AEHM) throughout the procedure.

“We are really satisfied with the work done because the interests of the hotels have been adequately defended and reflected in an exemplary sanctioning resolution that, without a doubt, marks a milestone in the defense of competition in our country,” adds Mª Paz Abad.

In this way, the sanction against Booking not only represents a victory for the affected hotels, but it also sets an important precedent for the regulation of digital platforms in the hotel brokerage market. The most obvious proof is the joy with which it has been received by the entire hotel sector.

About Tourism & Law

It is the Firm that advises companies in the tourism sector based on the in-depth knowledge of current legislation. With a preventive approach, its team of legal experts offers a comprehensive legal advice and assistance service that guarantees the peace of mind of companies and accompanies them in their daily lives. In addition, Tourism & Law is proud to undertake regulatory reporting to help build a quality tourism sector together.

Tourism & Law is a Grupo Atlântico company.

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