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The case against ‘Narrow’ price parity clauses
پرونده علیه شروط برابری قیمت "باریک":-2020 Authors: Price parity clauses have received significant amount of attention from both aca- demics and antitrust agencies. The predominant view is that ‘narrow’ parity clauses are not as pernicious as ‘wide’ parity clauses and they are necessary to restrict free-riding; for instance, free-riding of hotels on Online Travel Agents’ (OTAs) efforts. This paper chal- lenges this understanding. The paper builds upon a recent investigation report from the Bundeskartellamt in Booking.com case that empirically shows the insignificance of free- riding in the market for online hotel intermediation. With explicit reference to these empir- ical findings the German Supreme Court (BGH) has rejected a justification of narrow parity clauses and declared them as illegal. In the absence of a free-riding argument, the theory of harm that ‘narrow’ parity clauses stifle intra-brand competition between different distribu- tion channels and foreclose the market for the brokerage of hotel rooms through OTAs does not meet any justification. Additionally, the paper argues that even in the presence of free- riding, the transfer of wealth from hotels to OTAs is unjustified as ‘narrow’ parity clauses incentivise OTAs more than the risk they undertake.© 2021 The Author(s). Published by Elsevier Ltd. All rights reserved. Keywords: Most favoured nation clauses | Price parity clauses | Narrow MFN | Booking.com | Antitrust | Competition law |
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