European Union: Online Hotel Booking Sector Is Under The Spotlight Both In Turkey And Europe

Last Updated: 22 June 2017
Article by Özlem Kurt and Av. Gözde Yolal

In April 2017, The European Commission ("The Commission") published a report on "online hotel booking sector" ("Report") that has been investigated for a while and even being included in its some decisions.

For the preparation of the Report, the Commission has sent an electronic survey in July and August of 2016 to 161.000 hotels in 10 Member States, 20 online travel agents, 11 metasearch websites and 19 large hotel chains and reviewed the room price lists of hotels announced on metasearch websites and online websites of market players and in the reference period, which is from January 2013 to August 2016.

As the readers of this article would be aware of that within the reference period (prior to the end of the reference period) the Report focused on, the German Competition Authority's decision dated December 23, 2015 and Loi Macron, that result in the practice differentiation in Europe had already been published and the latter had already entered into force in France. After the decision in Germany and the new law in France, the Authorities in both France and Germany countries have gone far beyond the European competition law determinations in related sector by finding all the "most favoured customer" ("MFC") practices based on the parity clauses in favour of and room guarantees provided to only one or some market player/s in most of the cases against the competition. It seems that following the decision of the German Competition Authority and the effectivity of Loi Macron in France, the examination and observation of the Commission in the related sector have been accelerated, although the sector had already being monitored by the Commission priorly. 

By a strange coincidence, at the time where the Commission has accelerated its examination in the sector and most importantly almost around at the same dates with the German Competition Authority's decision and only shortly after the Report was published, an investigation has been launched against in Turkey and the Turkish Competition Authority adopted its first decision in the sector to be entirely against and the grounded decision shows the similarities with the German Competition Authorities' decision.

1. Content and Findings of the Report

The Commission's examination and the Report have focused on three main headings, which are (i) room price differentiation between sales channels (ii) room availability differentiation between sales channels and (iii) OTA commission rates.

While analysing the market under these headings, the Commission could observe theoretically the effect of the switch of the market players from wide favoured customer practice to narrow wide favoured customer practice in the market.

Although the meaning of the terms of "wide most favoured customer" ("wide MFC") and "narrow most favoured customer" ("narrow MFC") are well known in the sector, we consider necessary to provide you our readers with the definition of the practices, as both in Commission decisions and the Turkish Competition Authority's decisions especially the effects of the switch from wide MFC to narrow MFC have been discussed.

With wide MFC  practices or clauses in the agreements between market players and hotels, market players oblige hotels to offer the best conditions to itself in all the sales channels, regardless of it is online or offline or offered to other sale agencies or applied by hotels themselves. Unlike wide MFC practices, narrow MFC practices or clauses in the agreements between market players and hotels provide restrictions on the sales conditions only related to hotels' online bookings and oblige hotels not to offer better conditions on the hotel's own website. In this context, hotels will be able to offer better sales conditions including but not limited to room availability or price conditions to other online travel agencies ("OTA"), as well as to offer more advantageous conditions for their customers by their offline sales channels, such as phone bookings.

After providing you with the definition of wide MFC practices and narrow MFC practices, this is the time to inform you our readers about the findings of the Commission based on ratios and numbers under these three headings herein below.

a) Room price differentiation between sales channels

The Commission found out that, (i) 47% of the hotels that responded to the electronic survey said that they were not aware that market players had switched their practices from wide to narrow; (ii) 79% of the hotels that responded to the electronic survey said that they had not price differentiated between OTAs. The reasons most frequently given for not price differentiating were the fear of penalization clause in their contracts; the difficulty of managing different prices on different OTAs, and not wanting the hotel's website to appear as more expensive than the OTAs; (iii) For the 21% of respondents that did price differentiate between OTAs, the most frequent reason given was to increase the hotel's visibility on a particular OTA; (iv) the switch from wide to narrow MFC led to an increase in room price differentiation between OTAs by hotels in eight of the ten participating Member States, (v) the entry into force of the Loi Macron led to an increase in room price differentiation between OTAs by hotels in France; (vi) the prohibition of's narrow MFC led to an increase in room price differentiation between OTAs by Hotels in Germany.

b) Room availability differentiation between sales channels

From the stand point of room availability, (i) 69% of the hotels that responded to the electronic survey said that they had not differentiated between OTAs as regards room availability, (ii) in France and Germany taken together, 37% of the hotels had differentiated between OTAs for room availability and (iii) more than 80% of hotels without any limitation on a country basis said that they had not changed their behaviour as regards differentiating between OTAs for room availability since the switch to narrow MFC.

c) OTA commission rates

90% of hotels that responded to the electronic survey said that there had been no changes in the basic commission rate charged to them by OTAs. Only 3% of respondent hotels said that they had traded better room availability in return for a lower commission rate.

With regard to these findings of the Commission based on ratios, the Commission emphasized that the participation in the questionnaire in most of the countries is low; hotels did not understand some questions; price differentiation is not actual differentiation but referring different prices for rooms in different categories or differentiation like cancelation rights; France and Germany should not be taken into consideration due to their approach to prohibit the MFC practice in full, the monitoring exercise was carried out twelve months after market players switched to narrow MFC and six months after the adoption of the most recent prohibition decision in Germany against; it is possible that the sector might not yet have fully adapted to the changes made to the major OTAs' parity by the virtue of this short time period of examination; furthermore, the terrorist attacks that occurred in France and Belgium during the monitoring period may have affected the results relative to more typical tourist seasons.

2. The Last Situation On Online Hotel Booking Sector In Turkey

The investigation initiated with regard to by the Turkish Competition Authority ("Authority") upon the complaint of TURSAB (Association of Turkish Travel Agencies), which attracts public attention, started around the same dates when the Commission focused on the same topic.

The Authority decided to impose an administrative fine on due to its "best price guarantee" or other practices. The Authority resolved further that could not benefit from the individual exemption, since it does not meet the conditions necessary for the provision of the individual exemption, even though promised during the investigation to switch to narrow MFC and revise its contracts with hotels accordingly.


Although the aim for this Report was to create a common approach in the related sector, the report reveals that the observation of the Commission is not adequate to create a general and common practice in Europe and the market shall continue to be a subject of observation. In other words, although there has not been a consensus and clearness between the competition authorities' approaches yet, general and weighted tendency is in the direction of which the "narrow most favorable customer" practice does not result in the violation of competition. Considering the grounded decision of the Authority, it is the impression that the Authority's tendency is to decide in the direction of the approach embraced by the German Competition Authority ("Bundeskartelamt"). However, on grounds that the relevant product market has been defined for the first time with this decision; the Authority observes the developments and decisions of the related Authorities in Europe as well as Authority's tendency to shape and form its practice in the light of those developments in Europe, it seems that Authority would continue observing the online hotel bookings market in parallel which European Competition Authorities to do so.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Özlem Kurt
Av. Gözde Yolal
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions