Injunction filed against Booking.com forces CJEU to reexamine the threshold between contract & tort

Injunction filed against Booking.com forces CJEU to reexamine the threshold between contract and tort

Summary
The CJEU (Court of Justice of the European Union) case of Wikingerhof C-59/19 concerns an injunction claim brought by a hotel in Germany against booking.com, a leading online travel company, relating to specific commercial practices as these are disclosed in the General Term and Conditions of the website which are regularly updated electronically. The CJEU in this case raised a fundamental and age-old question of where the fine line or the threshold must be drawn, between special jurisdiction for contract and tort, under Article 7 Brussels Ia. Specifically, although the two parties are bounded by their own contract, tort law of the country of business should be also considered.

Facts
The question before the Court was whether the interpretation of Article 7 of Regulation No 1215/2012 leaves room to the claimant to seek an injunction against booking.com for certain commercial practices, relating to the allegation of abuse of its dominant market position. In particular, the promotion of the hotel on booking.com platform, was based on the percentage of the commission received, rather than pure business and competition practices. The Court took into consideration fundamental cases expressing different views in relation to whether contract or tort law should prevail. In this particular case, the CJEU followed the decision of AG Saugsmandsgaard Øe case, where the contract between booking.com and the hotel was not considered contractual, as certain practices of booking.com were considered unfair and contrary to the competition law, therefore tort law prevailed.

Ruling
The Court ruled that there was “an infringement of German competition law, which lays down a general prohibition of abuse of a dominant position, independently of any contract or other voluntary commitment. Specifically, Wikingerhof takes the view that it had no choice but to conclude the contract at issue and to suffer the effect of subsequent amendments to Booking.com’s general terms and conditions by reason of the latter’s strong position on the relevant market, even though certain of Booking.com’s practices are unfair.”

Commentary
This decision of CJEU, is important as it based on a long-standing debate of when contract or tort law should apply on particular issues. While traditionally the courts tend to apply contract law, the CJEU on this decision overturned previous rulings by stating that the interpretation of the parties’ contract is not indispensable and the action brought by Wikingerhof concerned tort law issues as it was a matter of legal obligation to refrain from any abuse of a dominant position. Moreover, the Wikingerhof case can be now used as a precedent for similar cases where booking.com promoted accommodation resorts in its platform by using unfair practices.
 
 
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