Austria: Austrian Ban On Most Favored Nation Clauses In The Online Travel Sector - A Benefit To The Consumer Or The End Of Online Booking Services In Austria?

Last Updated: 3 October 2016
Article by Stefanie Stegbauer and Michael Woller

Most Read Contributor in Austria, September 2019

On 14 June 2016, a draft law amending the Austrian Federal Act against Unfair Competition 1984 and the Austrian Price Labelling Act was published for public consultation (the 'Draft Law'). The Draft Law intends to introduce a ban on best price clauses (also referred to as price parity clauses or most favoured nation clauses, 'MFNs') in contracts between providers of booking portals (more commonly referred to as online travel agencies, 'OTAs') and hotel operators (in the following simply referred to as 'hotels').

After a public consultation period of only two weeks, the Draft Law passed the Council of Ministers on 12 July 2016. The Austrian Parliament is scheduled to decide on the Draft Law in autumn and - if approved - it is planned to enter into force by the end of 2016.

The reasoning behind MFNs in the online travel sector

OTAs provide travelers with the opportunity to search for, compare and book a multitude of travel offers (in particular lodgings) via a single platform. To hotels, OTAs offer the possibility to market their offer via the platform of the OTA (typically OTAs do not act as buyer/resellers and do not take inventory risk). Hotels (in particular smaller and independent ones) usually benefit from visibility of their offer on the platform, opening an additional marketing and sales channel to present to potential clients worldwide. The price parameters for the hotel accommodation offered via the platform of the OTA are set by the hotels.

In principle, both services - the worldwide presentation/promotion of the hotel on the platform and the possibility for consumers to search for a suitable offer, check availability, get information and compare offers/prices - are available for free. In order to finance the services of the OTA, hotels need to pay a commission (a percentage of the room rate) to the OTA, once (and only once) an actual booking is made via the platform and completed (i.e. not cancelled). However, once the customer has found a hotel via the platform, he can check whether the same or even better prices for the same offer are available via other booking channels (such as, in particular, the website of the hotel itself).

In such business model, MFNs are intended to prevent hotels from free-riding on OTA services by offering better prices in particular on their own website (which they could easily do by increasing the prices offered via the OTA) and by this jeopardising the functioning of the OTA business model. For consumers such clauses are beneficial since they can rely on the best price offers. Absent MFNs, consumers relying on the comfort of searching, comparing and booking an offer on one OTA would suffer disadvantages vis-à-vis consumers searching and comparing offers on various platforms, including the hotels' own websites. Hotels may likely inflate their prices offered via OTAs and thereby discriminate against consumers booking via such platforms.

Summary and potential consequences for e-commerce

The Draft Law prohibits best price clauses in contracts between OTAs and hotels and therefore significantly restricts their commercial freedom. Also, there appears to be no objective justification or a need for a national provision prohibiting MFNs in a very specific business relationship only. EU antitrust law deals with MFNs and - in contrast to the Draft Law - does not prohibit them, and even prohibits a national provision that is stricter than EU law. The UCP-Directive has introduced a catalogue of practices that are considered unfair and therefore impermissible - MFNs are not among them; the extension of the catalogue of practices under national law is prohibited due to full harmonisation. Under the E-commerce Directive, the intended law would not be applicable to OTAs located in EU Member States outside Austria. The Draft Law appears to be in conflict with the basic principles of EU law, such as in particular the principle of free movement of services between Member States and the (Digital) Single Market.

Commercially, the Draft Law puts the business model of OTAs at risk and may even have a deterrent effect on innovation and investments even beyond the specific industry: If hotels cannot be prevented by MFNs from setting higher prices on the website of the OTA than their own websites, hotels - after being found and chosen by the customer, i.e. having profited from the services of the booking platform for free - have an incentive to attract consumers to their own sales channel (where they do not have to pay a commission for the booking). Such free riding on the investments of OTAs could lead to a situation where more and more customers book Austrian hotels via other channels than OTAs and - as a consequence – OTAs as a result of a lack of remuneration for their services would most likely reduce their marketing activities and lower investments in the promotion of Austrian hotels. This in turn could be detrimental to the Austrian tourism industry and for the consumer, who could lose the benefit of a convenient and efficient resource for travel bookings.

A long version of this article first appeared on

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions