Will the new Belgian law on free prices in the tourism sector put an end to booking websites enforcing their conditions on hotels and B&B’s?

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In the middle of the summer period and while most Belgians stayed in a hotel somewhere in the South, a new law has been published that precisely makes the booking of such a hotel cheaper and more transparent for the consumer and at the same time to the hotel owner or to the operator to give another form of holiday accommodation more power in the mutual relationship with booking websites.

Booking websites are incontournable

Exactly those booking websites have acquired a very powerful economic position in recent years. Reservations for overnight stays are increasingly – and even predominantly now – via the Internet and those who want to be found in hotels, B & B and other holiday accommodations, are de facto obliged to be present at one of the many booking websites and comparison websites for hotel prices.

It is the necessity to be present on such platforms that gives booking websites the economic power to impose very unbalanced contractual clauses on hotels and B & Bs. These are more specifically clauses that prohibit hotels and B & Bs from offering their own rooms on their own website (or on third websites) at a price that is lower than the price on the booking website. Those with their hotel room on booking site X or Y can not offer the same room anywhere else.
This naturally restricts to a very large extent the competitive freedom of the hotels and B & Bs involved and it is not surprising that the Belgian legislature now – in imitation of a few other European countries – tries to set aside these practices.

What is changing?

The new law aims to ensure fair conditions of competition between the booking websites and the hotels by guaranteeing the latter the right to determine and adjust their overnight rates in all circumstances. Done with the ban to go under the online price. For example, if you have a few rooms left empty for the upcoming weekend, you can offer them with a discount from now on to get them filled.

The law itself is actually exceptionally short. She counts only seven articles, which can be summarized as follows:

1. The law applies to all contracts that conclude booking websites from all over the world with operators of accommodation located in Belgium, regardless of the law that applies to the contract concluded between a manager and a booking website. The booking website does not therefore escape Belgian law.
2. The rental price is freely determined by the operator. He is also perfectly free to grant a discount or other benefit.
3. Clauses that do not respect the above rules are void and are considered as not written.

Good news (?)

Good news for the traveler and for the tourist sector at first sight But caution is advised. The question remains whether a foreign court finds itself bound by this law. In that respect, the rules of private international law are rather complex and uncertain and anyone who invokes this law before a foreign court is likely to be rejected. And since most booking websites are foreign and in their standard conditions usually the exclusive jurisdiction to resolve disputes is given to foreign courts, this law risks losing its goal.

But at the very least, the Belgian government is trying to give a clear signal, that similar answers in other EU member states will still be able to restore the balance on the market.

Good news bis (?)

The problem described above is not limited to the tourism sector. Everywhere on the internet, the increasing economic power of platform websites and marketplaces is being established, which has become a mandatory sales channel for many online vendors and which are therefore in an unbalanced strong negotiating position.
The government, both Belgian and European, is also very aware of this and, especially at the level of the EU, intensive research has been carried out for a long time into the role and impact of marketplaces and platforms. Perhaps that is why, at a given point in time, a broader legislation will come about that, more generally, comes with anti-competitive obligations with regard to online sellers.

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