CJEU rules that Booking.com, based in the Netherlands, can be sued under German competition law for abuse of dominant position

November 26, 2020

The Court of Justice of the European Union has ruled in Case C-59/19 Wikingerhof GmbH & Co. KG v Booking.com BV, that a hotel using the platform Booking.com may, in principle, bring proceedings against Booking.com before a court of the member state in which that hotel is established to bring to an end a possible abuse of a dominant position.

The practices being complained about arose in the context of a contractual relationship. However, the rule of special jurisdiction in matters relating to tort, delict or quasi-delict set out in the Brussels I Regulation (1215/2012) applies to those practices.

German company Wikingerhof operates a hotel in Germany. In 2009 it concluded a contract with Booking.com BV, a company governed by Netherlands law, which has its seat in the Netherlands and operates an accommodation booking platform. It was a standard form contract and included a provision stating:

‘The hotel declares that it has received a copy of Version 0208 of the General Terms and Conditions … of Booking.com. These are available online at Booking.com …. The hotel confirms that it has read and understood the terms and conditions and agrees to them. The terms and conditions form an integral part of this contract …’

Booking.com amended its general terms and conditions several times and made those changes accessible on its extranet.

Wikingerhof objected in writing to the new version of the general terms and conditions that Booking.com had brought to the attention of its contracting partners. It claimed that it had had no choice but to conclude that contract and to suffer the effect of subsequent amendments to Booking.com’s general terms and conditions due to Booking.com’s strong position on the market for intermediary services and accommodation reservation portals, even though it argued certain practices of Booking.com are unfair and therefore contrary to competition law.

The case was ultimately referred to the CJEU after the German courts concluded that they did not have jurisdiction to hear Wikingerhof’s claims. The German courts asked if point 2 of Article 7 of the Regulation applies to an action seeking an injunction to stop certain practices implemented in the context of the contractual relationship between the applicant and the defendant, based on an allegation of abuse of a dominant position in breach of competition law.

Findings of the Court

The Court noted that the applicability of either point 1(a) or 2 of Article 7 of the Regulation depended on the court examining the specific conditions set out in those provisions. As a result, when a party relies on one of those rules, the court must ascertain whether the party’s claims concern, regardless of their classification under national law, matters relating to a contract or matters relating to tort, delict or quasi-delict under the Regulation. In particular, the court hearing the action must examine the obligation ‘relating to a contract’ or ‘relating to tort, delict or quasi-delict’ which constitutes the cause of action.

Therefore, an action concerns matters relating to a contract under point 1(a) of Article 7 of Regulation No 1215/2012 if the interpretation of the contract appears indispensable to establish the lawful or  unlawful nature of the conduct complained of. By contrast, if a party relies in its application on rules of liability in tort, delict or quasi-delict, and where it does not appear indispensable to examine the content of the contract to assess whether the conduct is lawful or unlawful, the cause of the action is a matter relating to tort, delict or quasi-delict under point 2 of Article 7 of Regulation No 1215/2012.

In this case Wikingerhof relied on an infringement of German competition law, which provides for a general prohibition of abuse of a dominant position, independently of any contract or other voluntary commitment. Therefore, the legal issue at the heart of the case was whether Booking.com committed an abuse of a dominant position under German competition law. This did not require the interpretation of the contract between the parties. Such interpretation would be necessary, at most, to establish that those practices actually occurred.

Consequently, the Court concluded that the action brought by Wikingerhof, to the extent that it was based on the legal obligation to refrain from any abuse of a dominant position, was a matter relating to tort, delict or quasi-delict under point 2 of Article 7 of the Regulation.