CJEU decides on admissiblity of capping discounts in online travel bookings

Michael Wukoschitz's picture

Eturas is the holder of exclusive rights to, and administrator of, the E-TURAS system, a common online travel booking system in Lithuania. It allows travel agencies which have acquired by contract an operating licence from Eturas to offer travel bookings for sale on their websites, through a uniform presentation method determined by Eturas. The abovementioned licensing contract does not contain any provisions which would allow the administrator of that system to alter the pricing set by the travel agencies using the system for the services that they offer. In 2010, the Lithuanian Competition Council opened an investigation on the basis of information received from one of the agencies using the E-TURAS system, stating that the travel agencies were coordinating among themselves the discounts offered on bookings made through that system. That investigation established that, on 25 August 2009, the director of Eturas sent to several travel agencies, or at least to one of them, an e-mail entitled ‘Vote’, asking the addressee to vote on the appropriateness of reducing the online discount rate from 4% to 1%-3%. On 27 August 2009 at 12:20 pm, the administrator of the E-TURAS system sent, through the internal messaging system, to at least two of the travel agencies concerned, a message entitled ‘Message concerning the reduction of the discount for online travel bookings, between 0% and 3%’ (‘the message at issue in the main proceedings’) and worded as follows:

Following an appraisal of the statements, proposals and wishes expressed by the travel agencies concerning the application of a discount rate for online travel bookings, we will enable online discounts in the range of 0% to 3%. This “capping” of the discount rate will help to preserve the amount of the commission and to normalise the conditions of competition. For travel agencies which offer discounts in excess of 3%, these will automatically be reduced to 3% as from 2:00 pm. If you have distributed information concerning the discount rates, we suggest that you alter that information accordingly.’

After 27 August 2009, the websites of eight travel agencies displayed advertisements concerning a discount of 3% on the travel packages offered. When a booking was made, a window appeared indicating that the travel package chosen was subject to a discount of 3%.The investigation carried out by the Competition Council established that, as a result of the technical modifications made to the E-TURAS system following the dispatch of the message at issue in the main proceedings, although the travel agencies concerned were not prevented from granting their customers discounts greater than 3%, they were nevertheless required to take additional technical steps in order to do so. In its decision of 7 June 2012, the Competition Council found that 30 travel agencies as well as Eturas had participated, between 27 August 2009 and the end of March 2010, in an anticompetitive practice in respect of the discounts applicable to bookings made via the E-TURAS system.

Upon referrence for preliminary ruling concerning the interpretation of Article 101 TFEU, lodged by the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court, Lithuania), the CJEU delivered the follwowing interpreation:

Article 101(1) TFEU must be interpreted as meaning that, where the administrator of an information system, intended to enable travel agencies to sell travel packages on their websites using a uniform booking method, sends to those economic operators, via a personal electronic mailbox, a message informing them that the discounts on products sold through that system will henceforth be capped and, following the dissemination of that message, the system in question undergoes the technical modifications necessary to implement that measure, those economic operators may — if they were aware of that message — be presumed to have participated in a concerted practice within the meaning of that provision, unless they publicly distanced themselves from that practice, reported it to the administrative authorities or adduce other evidence to rebut that presumption, such as evidence of the systematic application of a discount exceeding the cap in question.

It is for the referring court to examine — on the basis of the national rules governing the assessment of evidence and the standard of proof — whether, in view of all the circumstances before it, the dispatch of a message, such as that at issue in the main proceedings, may constitute sufficient evidence to establish that the addressees of that message were aware of its content. The presumption of innocence precludes the referring court from considering that the mere dispatch of that message constitutes sufficient evidence to establish that its addressees ought to have been aware of its content.

CJEU judgment of January 21, 2016 in case C-74/14 - Eturas e.a.

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