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Paul Zimmerman
pzimmerman@mrllp.com
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Rate Parity Agreements in Flux

In response to pressure from legislators in the European Union, Booking.com announced this week that it would accept amendments to its rate parity agreements with hotels located in France, Italy and Sweden. Booking.com explained in its press release that it is dropping its “price, availability and booking conditions parity provisions” with respect to other Online Travel Agencies (OTAs), but that it will continue to “require a minimum allocation, or some availability, from hotels” and will also retain its rate parity conditions with respect to hotels. The impact of this change in Booking.com’s policies has yet to be seen, but it represents a step closer to the demise of rate parity clauses.  However, it is at most a half-step, given that parity with a hotel’s own website is still required.

The change in Booking.com’s practices in Europe comes at a time when rate parity agreements in the United States are also under scrutiny. A closely-watched antitrust lawsuit against multiple hotel brands and OTAs, In re: Online Travel Company Hotel Book Antitrust Litigation, involved consumer allegations that the defendants had engaged in an industry-wide price fixing conspiracy involving rate parity in online booking. Over the plaintiffs’ objections, the case was dismissed by the U.S. District Court for the Northern District of Texas, finding that rate parity clauses were rational business strategies that did not constitute unlawful anti-competitive action. However, given the potential for tension between antitrust law and rate parity agreements, rate parity is likely to be a continued legal target in the industry, both in the United States and abroad.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.