CAN YOU SUE BOOKING.COM IN YOUR OWN COUNTRY? - THE ECJ RULED

09 December 2020

In the recent past, the Court of Justice of the European Union had to deal with the question whether an accommodation operator registered to Booking.com can sue the latter because of abuse of dominant position. In this short article we analyse the background of the case and the decisions of the Court of Justice of the European Union.

1. Facts

Probably the platform booking.com needs no introduction: the platform brings together companies offering accommodations with people searching for them. The platform is operated by Booking.com BV, a company registered in the Netherlands.

The company Wikingerhof whose registered seat is in Germany in Schleswig-Holstein and who operates a hotel, concluded a contract with Booking.com in 2009. The general terms and conditions of Booking.com formed an integral part of the contract and based on the contract the courts of Amsterdam have territorial jurisdiction to hear the disputes arising from the contract.

After the conclusion of the contract with Wikingerhof, Booking.com amended his general terms and conditions several times and published these amendments on his extranet site available only for the accommodation operators.

Wikingerhof disputed in writing that the version published on 15^th June 2015 of the general terms and conditions of Booking.com became part of their contract. He claimed that he only concluded the contract with Booking.com because of his strong position although in his view certain terms were unfair and contrary to the competition law.

2. Legal dispute before the German courts

Based on the above background Wikingerhof brought an action against Booking.com before the Landgericht Kiel (Regional Court Kiel) in Germany.

Wikingerhof requested the court to prohibit Boooking.com from affixing to the price specified by Wikingerhof without his consent, the indication ’preferential price’ or ’discounted price’, from withholding the contact information provided by its contracting partners on the platform and, lastly, from making the placement of the hotel which it operates in search requests dependent on the granting of commission in excess of 15%.

The Landgericht Kiel, by referring to the jurisdiction clause in the parties’ contract, held that it could not hear the action brought by Wikingerhof on the ground that it lacked jurisdiction.

The decision of the Landgericht Kiel on the establishment of the lack of his jurisdiction was upheld by the Oberlandesgerich Schleswig (Higher Regional Court Schleswig). Indeed, in the second instance court’s view, the jurisdiction of the German courts can be established neither based on Article 7 (1) (a) of the Brussels Ia Regulation[1], meaning based on the place of performance of the contractual obligation, nor in accordance with Article 7 (2) based on which the defendant may be sued in matters relating to tort, delict or quasi-delict, in the courts where the harmful event occurred.

Wikingerhof lodged an appeal on a point of law against the decision before the Bundesgerichtshof (Federal Court of Justice) which filed a request for preliminary ruling before the Court of Justice of the European Union (CJEU).

3. The question reviewed by the Court of Justice of the European Union

First, the Bundesgerichtshof assumed that the jurisdiction clause set forth in the contract between Wikingerhof and Booking.com is invalid, therefore it is not relevant in the case. Therefore, the applicability of other grounds of jurisdiction of the Brussels Ia Regulation shall be examined.

According to the Bundesgerichtshof the claim of Wikingerhof might concern tort, delict or quasi-delict within the meaning of Article 7 (2) of the Brussels Ia Regulation if it relates to claims for civil liability or an injunction that are based on the fact that the conduct complained of amounts to an abuse of a dominant position.

Based on the above, the Court of Justice of the European Union (“CJEU”) had to answer the question whether Article 7 (2) of the Brussels Ia Regulation must be interpreted as applying to the action seeking an injunction against certain practices implemented in the context of the contractual relationship between the applicant and the defendant, based on an allegation of abuse of dominant position by the latter in the breach of competition law.

4. The decision of the Court

According to the CJEU, the  jurisdiction to hear the case by the German courts depends specifically on the distinction to be made between, on the one hand matters relating to tort, delict or quasi-delict within the meaning of Article 7 (2) of the Brussels Ia Regulation, and, on the other hand, matters relating to contract within the meaning of Article 7 (1) (a) of the Regulation.

Based on the settled case-law of the CJEU an action concerns matters relating to a contract withing the meaning of Article 7 (1) (a) of the Brussels Ia Regulation 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 against the defendant.[2] That is in particular the case of an action based on the terms of a contract or on rules of law which are applicable by reason of the contract.[3]

By contrast, the action concerns matters relating to tort, delict or quasi-delict within the meaning of Article 7 (2) of the Brussels Ia Regulation, if the applicant relies on a 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 his conduct complained of.

In the CJEU’s view, in the present case in order to determine the lawful or unlawful nature of Booking.com’s complained practices, it is not indispensable to interpret the contract between the parties. Thus, according to the Court, subject to verification by the referring court, Wikingerhof’s action in so far as it is based on the obligation to refrain from any abuse of a dominant position, is a matter relating to tort, delict or quasi-delict within the meaning of Article 7 (2) of the Brussels Ia Regulation.

According to the CJEU the above interpretation is consistent with the objectives of proximity and sound administration of justice pursued by the Brussels Ia Regulation.[4] In the CJEU’s view the court of the market affected by the alleged anticompetitive conduct is the most appropriate for ruling whether that allegation is well founded, particularly in terms of gathering and assessing the relevant evidence in that regard.

5. Assessment of the decision

The CJEU has already emphasized that ‘matters relating to tort, delict or quasi-delict’ has to be delimited from its counterpart, Art 7 (1), granting jurisdiction in ‘matters relating to a contract’, with which it has a relationship of mutual exclusivity.[5]

The decision of the CJEU follows the distinction made by the Court in cases where there is an existing contractual relationship between the parties. The basis of the distinction between the grounds of jurisdiction set forth by Article 7 (1) (a) and (2) of the Brussels Ia Regulation is whether the interpretation of the contract is indispensable for the assessment of the unlawful nature of the defendant’s behaviour complained of.

When it comes to ‘matters relating to tort, delict, or quasi delict, the Court has given the term a broad autonomous meaning by interpreting it as comprising all actions which ‘seek to establish the liability of a defendant and which are not related to a contract within the meaning of [Art 7 (1)]. Art 7 (2) consequently covers cases in which there is ‘no freely assumed obligation by one party towards the another’.[6]

Case law shows that matters covers by Art 7 (2) comprise a variety of claims ranging from (but not limited to) classic torts such as traffic accidents, product liability claims, financial market liability claims, and prospectus liability claims to intellectual property rights infringements, antitrust cases, liability resulting from industrial actions, actions brought by consumer associations against traders, environmental torts, defamation and violations of privacy rights, and pre-contractual responsibility.[7]

The current decision of the CJEU seems to conform the broad interpretation of the concept ‘matters relating to tort, delict or quasi delict. Further, the judgement strengthens the position of the Court already taken in the flyLAL-Lithuanian Airlines (C‑27/17) decision in which the Court found that an action seeking compensation for damage caused by anticompetitive conduct falls under the category of ‘matters relating to tort, delict or quasi delict’.

The decision may be important for the partners of the platforms similar to Booking.com selling goods or services as in certain cases it makes them possible to bring an action on their own member state, if the conduct complained of falls into the sphere of abuse of dominant position.