policymakers demonstrate

Competition and Regulation in Markets for Goods and Services 207
In a statement relating to the Adidas case, BKartA took the view ‘that the
trading possibilities offered by the Internet create new challenges for both manufacturers
and retailers’and that it is its ‘task to keep markets and opportunities
open for the benefit of retailers and consumers’. The statement continues, ‘It
goes without saying that manufacturers can select their distributors according
to certain quality requirements. However, both under European and German
competition law they are prohibited from largely eliminating a principal distribution
channel such as the web.’
5.2.4 Online Travel Agencies and MFNs
In a series of cases across Europe, competition authorities have looked at MFN
clauses and other pricing restrictions in relation to the operation of online travel
agencies. In January 2015, the Düsseldorf Higher Regional Court rejected the
appeal of Robert Ragge GmbH’s Hotel Reservation Service (HRS) against the
decision of the Federal Cartel Office (Bundeskartellamt) of December 2013. In
its decision, the authority had prohibited HRS from continuing to apply its ‘best
price’ clause and at the same time initiated proceedings against the hotel booking
portals, Booking.com and Expedia, for applying similar clauses in their
contracts with their hotel partners. Under the ‘best price’ clauses the hotels are
obliged to always offer the hotel portal their lowest room prices, maximum
room capacity and most favourable booking and cancellation conditions available
on the Internet.
The Düsseldorf Higher Regional Court decision has confirmed that HRS’s
‘best price’ clauses restrict competition to such a degree that they cannot be
exempted under the TFEU Block Exemption Regulation, or as an individual
exemption. The Federal Cartel Office originally issued a statement of objections
against HRS in early 2012 focusing on the company’s policy which bans hotels
from offering better deals to customers who book directly through the hotel or
through another booking platform. The concern was that, while the clauses used
(also by other travel websites) may appear to benefit consumers, in reality they
may eliminate competition for lower room prices between the hotel booking
portals. Consumers are worse off because they cannot get a better price or better
quality service conditions by exploring alternative reservation paths. 22
Several other competition authorities in Europe have also recently conducted
similar investigations against hotel booking platforms in relation to their ‘best
price’ clauses. These include the UK’s Office of Fair Trading case against Expedia
Inc. and Booking.com in coordination with InterContinental Hotels Group
PLC and the Swiss Competition Commission’s case against several online
travel agencies, including Booking.com, Expedia and HRS. 23
How competition policy should treat the employment of MFN clauses (by
online platforms or otherwise) is not a simple matter and how economic