By resolution of January 9, 2015, the 1st Cartel Senate of the Düsseldorf Higher Regional Court, chaired by Prof. Dr. Jürgen Kühnen, confirmed the view of the Federal Cartel Office that the “best price clauses” agreed between HRS-Hotel Reservation Service Robert Ragge GmbH (“HRS”) and its contract hotels are anti-competitive. The Senate therefore dismissed HRS's appeal against a decision of the Federal Cartel Office dated December 20, 2013, which prohibited HRS from further implementing and agreeing to “best price clauses.”
In its reasoning, the Senate stated that the best price clauses practiced by HRS restrict competition, inter alia, among the various hotel portal providers. This constitutes a violation of Section 1 of the Act against Restraints of Competition (GWB). Due to the best price clauses, hotel companies are prevented from setting different hotel room prices and other conditions for various portals and for direct sales. The best price clauses oblige them to always grant HRS at least equally favorable room prices and price conditions. Furthermore, due to the clauses, HRS may not be placed in a worse position than other distribution channels regarding availability, booking, and cancellation conditions. The agreement of a best price clause also removes the economic incentive for other hotel portals to offer HRS hotel companies lower commission fees in exchange for the opportunity to offer hotel rooms through their portal at more favorable prices and conditions than HRS.
Since HRS's market share, as determined by the Federal Cartel Office, exceeds 30%, the best price clause causes a noticeable distortion of competition and is not exempted from the cartel prohibition by the relevant block exemption regulation (Art. 101 para. 3 TFEU in conjunction with Art. 3, 7 Vertical Block Exemption Regulation). Furthermore, the best price clauses are not permissible due to efficiency gains under the legal exception of Art. 101 para. 3 TFEU.
The Senate allowed an appeal on points of law to the Federal Court of Justice against its decision, because the Federal Cartel Office is conducting proceedings against other hotel portal providers based on best price clauses and best price clauses are also the subject of cartel proceedings in other European countries.
File number: Higher Regional Court Düsseldorf, VI – Kart. 1/14 (V)
Source: Press release of the Higher Regional Court Düsseldorf
Goldberg Attorneys 2015
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Attorney for Information Technology Law
Email: info@goldberg.de
