Booking fined for abuse of dominant position: CNMC action in digital markets

Booking acts primarily in the market as an online travel agency, intermediating between hotels and customers seeking to make a reservation. According to the CNMC, Booking would have imposed a number of unfair trading conditions on hotels located in Spain that used its booking intermediation services, also restricting competition from other online travel agencies providing similar services:

• The unfair terms imposed on hotels in Spain would be, in particular: (i) a pricing clause that would prevent hotels from offering rooms on their own websites at a lower price than the one offered on Booking (at the same time, Booking reserved the right to unilaterally lower the price of the hotels displayed on that platform), and (ii) the lack of transparency in the information provided on subscriptions to specific programmes that allowed hotels to improve their positions in Booking's results ranking.
  A number of clauses considered abusive (e.g. the exclusive validity of the general terms and conditions in English, the applicable law of the Netherlands, and the competent courts in Amsterdam in case of dispute) were also imposed.
   
• In addition, Booking would have restricted competition from other online travel agencies, through the use of certain formulas imposed on customers, such as the use of the total number of bookings of a hotel as a criterion for positioning in Booking's results list, or the use of a hotel's performance for Booking as a criterion for accessing and remaining in specific programmes. These formulas would seek to concentrate hotel activity on Booking, excluding other competing agencies.

In addition to the financial penalty, the CNMC has imposed various behavioural obligations on Booking to prevent the platform from desisting from applying these or similar conducts in the future.

The contentious-administrative jurisdiction will have to clarify, following the appeal announced by Booking against the aforementioned Resolution, to what extent the aforementioned practices can be considered anti-competitive. The case law on abusive conduct has so far focused on whether or not there is reasonable economic justification for conduct that may have exclusionary effects on the market.

At the same time, it will be necessary to be attentive to other consequences that this ruling may have for Booking in the form of possible legal claims for damages by customers and/or competitors who have been harmed, for example.

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