Expedia 2015 Annual Report Download - page 45

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While the ultimate outcomes of these lawsuits, inquiries or investigations are uncertain and our
circumstances are distinguishable from those of other online travel agencies subject to similar lawsuits, inquiries
or investigations, we note in this context that on April 21, 2015 the competition authorities in France, Italy and
Sweden announced a proposed set of commitments offered by Booking.com to resolve the parity clause cases
brought by these authorities against it. The German Federal Cartel Office (“FCO”) also has required another
online travel company, Hotel Reservation Service (“HRS”), to remove certain clauses from its contracts with
hotels. HRS appealed this decision, which the Higher Regional Court Düsseldorf rejected on January 9,
2015. On December 23, 2015, the FCO announced that it had also required Booking.com to remove certain
clauses from its contracts with German hotels. Booking.com announced that it will appeal this decision. In
addition, with effect from August 1, 2015, Expedia waived certain rate, conditions and availability parity clauses
in its agreements with its European hotel partners for a period of five years. While Expedia maintains that its
parity clauses have always been lawful and in compliance with competition law, Expedia considers that this
waiver is a positive step towards facilitating the closure of the open investigations into such clauses on a
harmonized pan-European basis. It is not certain what the outcome will be of the competition authorities’
assessment of Expedia’s announcement. Since Expedia’s waivers were implemented, the competition authorities
in Denmark, United Kingdom, Greece, Norway, Sweden, Poland and Ireland have announced either the closure
of their investigation against Expedia or a decision not to open an investigation against Expedia, in each case
having had regard to the changes implemented by Expedia. On November 6, 2015, the Swiss competition
authority announced that it had issued a final decision finding certain parity terms existing in previous versions
of agreements between Swiss hotels and each of Expedia, Booking.com and Hotel Reservation Service to be
prohibited under Swiss law. The decision explicitly notes that Expedia’s current contract terms with Swiss hotels
are not subject to this prohibition. The Swiss competition authority imposed no fines or other sanctions against
Expedia and did not find an abuse of a dominant market position by Expedia.
On July 9, 2015, the French National Assembly adopted Article 133 of the Loi Macron (“Article 133”) that
seeks to define the nature of the relationship between online reservation platforms and French hotels. Article 133
became effective on August 8, 2015. Expedia considers that Article 133 was drafted ambiguously and can be
interpreted in a way that violates both European Union and French legal principles. Therefore Expedia has
initiated a complaint with the European Commission relating to Article 133. However, following the effective
date, Expedia has been in contact with its hotel partners in France regarding the impact of Article 133.
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