"Best price clauses" by HRS contrary to cartel law and thus inadmissible

In a decision of 9 January 2015, the 1st Cartel Senate of the Düsseldorf Higher Regional Court, chaired by Prof. Dr Jürgen Kühnen, confirmed the Bundeskartellamt's view that the "best price clauses" agreed between HRS-Hotel Reservation Service Robert Ragge GmbH ("HRS") and its contract hotels are contrary to cartel law. The Senate therefore dismissed HRS's appeal against a Bundeskartellamt decision of 20 December 2013 prohibiting HRS from further implementing and agreeing "best price clauses".

The senate explained that the best price clauses practised by HRS restrict competition, inter alia, between the different hotel portal providers. This constitutes a violation of Section 1 of the Act against Restraints of Competition (GWB). Due to the best price clauses, the hotel companies were prevented from setting their hotel room prices and other conditions differently vis-à-vis the various portals and in their own distribution. The best price clauses obliged them to always grant HRS at least the same favourable room rates and price conditions. The clauses should also not put HRS in a worse position than other distribution channels with regard to availability and booking and cancellation conditions. Furthermore, the agreement of a best price clause deprives other hotel portals of the economic incentive to offer lower agency commissions to HRS hotel companies in return for the possibility to offer the hotel rooms via their portal at more favourable prices and conditions than HRS.

Since the market share of HRS determined by the Bundeskartellamt exceeds 30%, the best-price clause has the effect of appreciably restricting competition and is not exempted from the ban on cartels by the relevant Block Exemption Regulation (Article 101(3) TFEU in conjunction with Articles 3 and 7 of the Vertical Block Exemption Regulation). Nor were the best price clauses permissible on the basis of efficiency advantages under the legal exception of Article 101(3) TFEU.

The Senate allowed an appeal against its decision to the Federal Court of Justice (Bundesgerichtshof), as the Federal Cartel Office was conducting proceedings against other hotel portal providers on the basis of best price clauses and best price clauses were also the subject of cartel proceedings in other European countries.

Reference: OLG Düsseldorf, VI - Kart. 1/14 (V)


Source: Press release of the OLG Düsseldorf


Goldberg Attorneys at Law 2015

Attorney at Law Michael Ullrich, LL.M. (Information Law)

Specialist lawyer for information technology law

E-mail: info@goldberg.de