Thanks to Marianna Riedo for collaborating on this article
The Court of Justice of the European Union, in Case 59/19, ruled that, to challenge a possible abuse of dominant position, a hotel using an online booking platform is entitled to bring proceedings against that platform before a court of the Member State where the hotel is established, regardless of the jurisdiction clause set forth in the contract between them.
The dispute originated from the contractual relationship between Wikingerhof GmbH & Co. KG (“Wikingerhof”), a company operating a hotel in Germany, and Booking.com, an accommodation booking platform incorporated under the law of the Netherlands. The hotel signed a contract with Booking.com in 2009, agreeing to its General Terms and Conditions (“T&Cs”). Subsequently, over the years, Booking.com amended its terms and conditions several times, making them available through the company’s extranet. Wikingerhof argued that it had no other option than to accept the new conditions entirely, due to the strong position of Booking.com as an intermediary in the online accommodations market.
In light of the above, Wikingerhof brought an action before the Regional Court of Kiel, in Germany, claiming that Booking.com’s practices were unfair and constituted an abuse of dominant market position contrary to the principles of competition law. The applicant asked the court to issue an injunction prohibiting Booking.com from (i) displaying reduced or discounted room prices without the hotel’s consent; (ii) withholding contact details provided by its contractual partners on the platform; and (iii) making the placement of the hotel in search results dependent on a commission in excess of 15 percent.
Booking.com argued that German courts lacked the authority to rule in the case, as the T&Cs undersigned by Wikingerhof required all disputes concerning the contract to be brought before a Dutch court.
Wikingerhof entered its action at the Regional Court of Kiel by claiming that the jurisdiction clause included in the T&Cs only applies to disputes arising from the contractual relationship, while the contested conduct on the part of Booking.com was a violation of German antitrust law and thus a tort – not a contractual breach. Hence, Wikingerhof argued that the T&Cs were not relevant to the case, but instead Article 7 of Regulation No. 1215/2012 should apply.
The Regional Court of Kiel and, following appeal, the Higher Regional Court of Schleswig, both concluded that they lacked jurisdiction over the controversy, which was eventually referred to the CJEU for a preliminary ruling on the matter of jurisdiction. In particular, the CJEU was asked whether Article 7 of Regulation No. 1215/2012 applies to an action seeking an injunction to stop practices allegedly breaching competition law when such practices are implemented in the context of a contractual relationship.
In answering the question, the judge ascertained that, irrespective of national law, it is necessary to consider whether the applicant’s claims based on Article 7 concern matters relating to a contract or to tort, delict or quasi delict, as set forth in Regulation No. 1215/2012. Indeed, as a general rule the Regulation provides jurisdiction to the courts of the Member State where the defendant is domiciled (Article 4). In this case, the domicile of Booking.com, under the meaning of the aforementioned provision, would be the Netherlands. However, Regulation No. 1215/2012 also sets forth rules allowing the plaintiff, in certain cases, to bring proceedings against the defendant before the courts of another Member State (Article 7). The Regulation specifically provides for special jurisdiction on “matters relating to tort, delict or quasi delict” (Article 7 No. 2), which gives the plaintiff the option to bring the action before the court of the place where the harmful event occurred.
According to the CJEU “an action concerns matters relating to a contract if the interpretation of the contract between the defendant and the applicant appears indispensable to establish the lawful or, on the contrary, unlawful nature of the conduct complained of.” By contrast, “where the applicant relies, in its application, on rules of liability [deriving from] breach of an obligation imposed by law, and where it does not appear indispensable to examine the content of the contract concluded with the defendant in order to assess whether the conduct of which the latter is accused is lawful or unlawful, since that obligation applies to the defendant independently of that contract, the cause of the action is a matter relating to tort, delict or quasi-delict within the meaning of point 2 of Article 7 of Regulation No 1215/2012.”
In its reasoning, the CJEU followed the recommendations of Advocate General Saugmandsgaard Øe, who determined that a claim of liability based on competition law provisions is a matter of tort, delict or quasi delict under the meaning of Article 7 No. 2. Accordingly, the CJEU found that even though the contested practices were implemented within the context of a contractual relationship, matters relating to the infringement of antitrust law can be decided before the court of the place where the harmful event occurred, which, according to established case-law, may be identified as the place of establishment of the party claiming competition law infringement.